S&P 500 CAPE Hits 20-Year High as Motley Fool Urges Crash Preparation
Updated
Updated · The Motley Fool · Jun 22
S&P 500 CAPE Hits 20-Year High as Motley Fool Urges Crash Preparation
3 articles · Updated · The Motley Fool · Jun 22
Summary
9.6% gains in the S&P 500 this year have pushed its Shiller CAPE ratio to the highest level since the dot-com era, a valuation signal often tied to weaker future returns.
AI infrastructure spending and resilient earnings helped drive the rally, but the report warns prices may now be outrunning sustainable earnings growth, raising the risk of a correction or crash.
Motley Fool advises investors to rebalance toward bonds and defensive sectors such as utilities, healthcare and consumer staples, while building cash reserves to avoid forced selling and buy market dips.
Stop-loss orders, shifts into higher-quality companies and dollar-cost averaging into blue-chip stocks were presented as ways to limit downside while keeping a long-term investing approach.