The S&P 500 Is Doing Something Unseen in More Than 100 Years -- Here's What History Says Happens Next
Can the bull market keep rallying?
The S&P 500 Is Doing Something Unseen in More Than 100 Years -- Here's What History Says Happens Next
Overview
The S&P 500 (SNPINDEX: ^GSPC) has experienced one of the strongest bull markets in history during the past few years. The index produced total returns of 26%, 25%, and 18% in 2023, 2024, and 2025, respectively, and it's posted another 7.8% gain year to date (as of June 12). And that rally follows a strong performance ever since the market bottomed in March 2009.
But as the benchmark index sits near its recent all-time high, investors may be growing increasingly concerned about valuation. For example, the S&P 500's Shiller price-to-earnings (P/E) ratio currently sits at more than 41, a level it hasn't seen outside of the dot-com bubble. Meanwhile, the price-to-book and price-to-sales ratios of the index are sitting at all-time highs.
Details
Warren Buffett's favorite valuation measure is comparing the market capitalization of the stock market to gross domestic product (GDP). The S&P 500's market cap currently is double the trailing-12-month GDP, the highest level since 1929. And if you adjust that ratio for prevailing Treasury bond yields, the S&P 500 is trading at its highest premium in more than 100 years, dating back to 1920, according to CME Group data.
Source
Originally published at www.fool.com.
