The Stock Market Just Passed a Threshold It's Only Crossed Once in 150 Years. Don't Ignore History.

The S&P 500's cyclically adjusted price-to-earnings (CAPE) ratio has crossed 40 for only the second time in 150 years, matching levels last seen during the 1999 dotcom bubble that preceded a 50% market crash. While today's AI-leading companies have stronger fundamentals than 1999 counterparts, the elevated valuation metric suggests unsustainable market conditions and weak long-term returns ahead, prompting investors to avoid high-growth stocks without earnings and consider diversification beyond tech and AI sectors.