CAPE
DoubleLine Shiller CAPE U.S. Equities ETF
stock NYSE ETF

CAPE is around 38. You know what it was 5 years ago? 38. You know what it was 4 years ago? 37. It's relatively high but not insanely so. My theory is that the internet has changed things so much (and AI will do more) that the old rules do not apply. As a 67M old fart, it is astonishing to look back at how unproductive we were in the early 90s, 80s, 70s compared to now. Kids these days have no idea how much time we wasted in libraries, searching for info, comparison shopping, etc.

This is the most reasonable advice to me. And, of course, we can't predict the future. However, based on what's rhyming with the past, the market seems well into the overpriced category. CAPE index, P/E ratios in general, insane-record-setting bounce-back... How do you continue to DCA if there's decent chance of realising 2-3% avg growth (in a decade) if you buy at current price levels?

I am out of the S&P 500 until it’s CAPE is no longer multiple standard deviations above the recent historic mean. My US allocations are in the more reasonably priced VYM and SCHD and BRK.B and I am happy to trade the accompanying peace of mind (insulation from AI bubble risk) for a few points of underperformance.
Even after trimming 2025 gains I am overweight developed international index funds and value like VYMI and AVDV - I think these companies are poised to continue benefiting from the US shooting itself in the balls as a trading partner on the global stage. Also overweight countries at historically low CAPES going into 2026 like Brazil (this worked out pretty well last year with S Korea), which being a commodity-heavy economy also adds some stagflation protection.
Stagflation is hedged by replacing what was formerly the traditional bond sleeve of the portfolio with a mix of gold, cash in the vanguard treasury MMF, and more recently a small amount of oil/mixed commodities. Not seeing the value proposition of long term treasuries right not but if some fiscal crisis materializes and rates skyrocket I might get in at that point.
My hedge for the “AI is real” scenario is simply staying invested and only letting my nerves push me from S&P into high-dividend funds versus into cash- I figure If the AI productivity boom is real, a bunch of these mature companies are going to revalue on reduced labor costs anyway.

Hi everyone,
I am a follower from Europe, and I know you will probably be rolling your eyes over this post, but I cannot help but wonder:
The US is currently 60% of the global stock index. This has been justified by earnings, but is is also true that earnings are much higher than historical averages (hence the very high CAPE ratios) also due to AI investment and large deficits, which have questionable sustainability in my view.
At the same time, and for an international investor, the fact that the USD is 10-20% overvalued by most estimates is also relevant.
Is anyone (particularly international investors) tilting away from the global US weight, to reduce exposure to US specific risks and improve diversification?
The core of my portfolio is the global index at market weights, but I have been considering starting to tilt away from the US.
Thank you!

This is the second-highest CAPE reading in 155 years of data. The only time it's ever been higher was the literal peak of the dot-com bubble.

The market is [2 standard deviations overvalued](https://www.currentmarketvaluation.com/) compared to historical trend (by CAPE ratio, Buffett Indicator, Mean Reversion). i.e. - Bubble territory
Historically, whenever this has happened (such 1929, 1999/2000, 2021, and now) there has always been a crash and a better opportunity to buy in at a lower price and valuation (contrary to what all the "Time in the market beats timing the market" people parrot).

1920 started with a CAPE ratio of 6 lol. And the 1910s were essentially a lost decade.
I continue to believe that incredible investing returns cannot start from peak valuations.
That's not to say that the economy and market can't stay strong, but it's just a strange bet to make - the base case, almost by definition, cannot be 15% annualized returns for the next decade.

The problem with ALL metrics is that they can’t tell the future. The Buffet indicator is flawed, Schiller CAPE is better, but both are looking on the rear view. What do earnings from 3 years ago or 10 years ago tell you about earnings 2-3 years from now? When there is a game changer like AI happening right now, which people believe will lead to greatly increased profitability in the future, earnings from 3 years ago are irrelevant. Whether the market is overvalued right now really depends on whether you believe companies will make the profits to justify these valuations or not.

Well, $7M will allow you to take out $280k pre-tax, for a budget of $200k-$250k actual spend depending on where you like and what you’re invested in. Is that enough? If you are currently spending $400k a year, I would argue that you’ll want more.
So maybe a middle ground. If you currently make $700k, you could spend $300k, pay $250k in taxes and save $150k a year. That will allow you a very cushy life and you can still save enough for your retirement without compromising your current lifestyle.
PS: most planners do not use a 7% forward rate of real returns for VOO. At current CAPE levels that’s extremely aggressive. But endless digital ink has been spilled on this