The Market Is Doing Something It's Only Done Once Before. Here's What History Says Happens Next.
You might be disappointed to find out, but there's a silver lining.
Overview
The S&P 500 (SNPINDEX: ^GSPC) is up a phenomenal 14% year to date, and if this year is anything like previous years, it will end 2026 even higher. That would be the fourth year in a row with double-digit gains, which hasn't happened since the late 1990s, when the S&P 500 had five years of double-digit gains.
There's something else that hasn't happened since then, either. The cyclically adjusted price-to-earnings ratio, or CAPE ratio, surpassed 40 only one other time -- in January 1999, the fifth year of double-digit market gains.
Details
This metric, which adjusts the price-to-earnings ratio for inflationary impact, is seen as a more reliable valuation metric for the market than the average P/E ratio for the 500 stocks in the index. Today, it's nearly 41 after surpassing the 40 mark in May.
Source
Originally published at www.fool.com.