At the beginning of every month, we look at various market valuation metrics to consider forward returns and assess risk levels.
Bottom line: the market sits at a point more expensive than it was before the great dislocation in 2008. It sits just off of the second highest level in history. Risk remains high.
After the recent “Trump rally,” valuations are even higher. Median P/E has risen from 21.9 to 22.8 as of November 30, 2016. Thus, no change in what this tells us about the probability for low forward 10-year returns.READ MORE