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US CAPE ratios are at levels previously reached only in 1929 and during the tech bubble. Should we fear the lofty valuation multiples, or should we fear the CAPE ratio itself, because of its notorious unreliability in picking market peaks and troughs?
By Rob Arnott Vitali Kalesnik Jim Masturzo
January 2018 | Read Time: 30 min
Beware the consequences of assuming that elevated CAPE ratios are here to stay, but if they are the “new normal,” low future returns are likely to be the “new normal” as well.
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