CAPE Ratio
CAPE — Cyclically Adjusted Price-to-Earnings — divides the current market price by the average of 10 years of inflation-adjusted earnings. By smoothing earnings over a decade, it removes the distortion of short-term earnings booms and busts. A high CAPE suggests markets are expensive relative to their long-run earnings power; a low CAPE suggests relative cheapness. The US historical median CAPE is around 16–17.
See this in P2: P2's Markets Regime page shows the current US CAPE ratio, its historical range, and its percentile rank — placing today's valuation in historical context.Open →