S&P 500 CAPE Ratio Hits 39‑41, Second‑Highest Ever
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- S&P 500 has posted at least 16% annual gains for three straight years on three separate occasions in its history, with two of those streaks occurring between 2019‑2021 and 2023‑2025.
- Shiller P/E Ratio (CAPE) has hovered between 39 and 41 over the past five months, the second‑priciest level ever recorded and the sixth time in 155 years it has stayed above 30 for at least two months.
- Barchart highlighted on Dec 28 2025 that the S&P 500’s Shiller PE ratio hit 41.20, the highest level since the dot‑com bubble, making it the second‑highest historical reading.
- Bespoke Investment Group reported that the current “AI Bull” market has now exceeded 1,200 days, the 10th bull market to surpass 1,000 days, while average bear markets last only about 286 days.
- X (formerly Twitter) hosted Bespoke Investment Group’s data set analyzing the length of every S&P 500 bull and bear market since the Great Depression.
Why it matters: Investors face heightened risk as the S&P 500’s CAPE ratio sits at 39‑41, a level that has historically preceded 20%+ market pullbacks; while short‑term holders may see losses, long‑term investors can view the inevitable correction as a buying opportunity and could reshape portfolio strategies.
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