This Stock Market Warning Is Flashing Red for the 2nd Time in 145 Years. Here's What History Says Comes Next.

Key Points A CAPE above 40 suggests the S&P 500 is historically expensive, but it does not predict when stocks will fall. CAPE has been more useful for setting long-term return expectations than for timing a crash. Investors should keep investing selectively, focusing on durable, profitable companies with strong balance sheets. 10 stocks we like better than S&P 500 Index › This has been anything but a boring year for the stock market. After falling sharply earlier in the year, at recent prices, the Dow Jones Industrial Average is up 15% from its March low, while the S&P 500 (SNPINDEX: ^GSPC) is up 22%, and the tech-heavy Nasdaq Composite is up a whopping 30%.