Be careful with "raw" PE ratio. It peaks when earnings have already collapsed due to the denominator effect. Median of S&P500 price/sales (not quite the same a

Be careful with "raw" PE ratio. It peaks when earnings have already collapsed due to the denominator effect. Median of S&P500 price/sales (not quite the same as median of price/earnings of course): http://mebfaber.com/2015/03/13/stocks-are-the-most-expensive-since-the-1960s/ http://mebfaber.com/2015/03/13/stocks-are-the-most-expensive... Median of price/earnings for the broad NYSE universe: http://www.hussmanfunds.com/wmc/wmc150112.htm http://www.hussmanfunds.com/wmc/wmc150112.htm I don't think it's controversial to state that high valuations in equities are more broadly carried. (Hussman's weekly column is an interesting source of opinions on where these broad valuation measures stand at any given time.) Obviously, that doesn't automatically imply that any sort of deep loss is imminent. I believe it does say something about what you can reasonably expect in terms of long term total returns.