Please consult a qualified financial advisor before making any investment decisions. This blog is for educational purposes only and does NOT constitute individual investment advice.
Tuesday, September 27, 2016
Now that we have the first U.S. Presidential debate behind us and we have worked through most of September (historically one of the worst months for the market), let's take a look at the S&P 500. CNNMoney Fear & Greed Index registers this morning with a reading of fear. This measure has been decreasing since a peak in the spring of 2016. Shiller PE ratio: Current P/E on the S&P 500 shows a level near 25, currently 24.99, which illustrates an overvalued market. Let’s review the Shiller PE Ratio that is reading 26.80 (long-term mean of 16.70, median 16.05). This also shows that the market is overvalued. So price action is positive, investor sentiment is growing more fearful, and valuation continues to give investors a warning sign. S&P 500 earnings peaked in 2014, this also creates a warning as the market usually follows earnings.