Interesting article about market valuations and alternatives to CAPE, below is an excerpt and some graphs

via Alpha Architect

 

Although there are a number of lenses useful for assessing market conditions, many feel that Robert Shiller’s CAPE (Cyclically-adjusted PE ratio) index is among the more reliable yardsticks for measuring market valuations (we explain the CAPE ratio here). Note: CAPE is not a superhero; there are other ways to value the market).

Bob Shiller recently discussed his index, expressing concern about current valuations (we examined this about a year ago).

Overvalued Market, Market overvalued, CAPE

The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

 

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The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

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See full Is the Market Overvalued? Depends on How You Frame it… by Jack Vogel, Ph.D. via Alpha Architect