The Stock Market Is Repeating a Rare Historical Pattern, But History Has Good News for Investors

Key Points The S&P 500 index might be getting historically overpriced, according to the Shiller CAPE Ratio. This widely watched metric has been a previous sign of bear markets. If you’re worried about high valuations in the S&P 500, buying small-cap stocks might be a good move for long-term investors. 10 stocks we like better than S&P 500 Index › The past few years have seen strong returns from the S&P 500 index (SNPINDEX: ^GSPC) , but one of the most important valuation metrics is flashing a big warning sign. The Shiller CAPE Ratio was developed to measure cyclically adjusted price-to-earnings ("CAPE") for the 500 largest publicly traded stocks in the U.S. market.