Shiller: CAPE Ratio Is High But You Should Still Own Stocks

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Shiller: CAPE Ratio Is High But You Should Still Own Stocks
By World Economic Forum from Cologny, Switzerland [CC BY-SA 2.0], via Wikimedia Commons

Stocks started Monday in positive territory after taking a break from the selling last week when the Dow (^DJI) and Nasdaq (^IXIC) both rose 2.4%, posting their biggest weekly gains since December and November, respectively. The S&P 500 (^GSPC) meanwhile rose 2.7%, its biggest weekly gain since last July. And indexes tracking sectors that have been hard-hit recently including biotech and Internet stocks climbed more than 3%. Robert Shiller’s take below.

Shiller: CAPE Ratio Is High But You Should Still Own Stocks

So what’s next?

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Some market watchers have pointed to Yale professor and Nobel Prize winner Robert Shiller’s cyclically-adjusted price/earnings ratio, or CAPE, to raise concerns that stocks are expensive. The Daily Ticker’s Henry Blodget has