The Stock Market Is Doing Something Observed Just 3 Times Since 1871 -- and History Is Crystal Clear What Happens Next

Despite a rough patch in the earlier part of the year in response to the Trump administration's tariff plan, it has been a good year so far for the stock market's three main indexes: the S&P 500 (SNPINDEX: ^GSPC), the Nasdaq Composite, and the Dow Jones. Through Oct. 21, they're up 14.7%, 19%, and 10.8% year to date, respectively.These gains should undoubtedly be celebrated, considering they seemed to be on a much worse path at some point, but with them have come historical feats that could be a warning sign -- especially when looking at the S&P 500. There are several metrics used to determine the costliness or cheapness of stocks and indexes, but one of the most relied-upon for the S&P 500 is the Shiller price-to-earnings (P/E) ratio, also known as the CAPE ratio.While the standard P/E ratio tells you how much you're paying per $1 of a company's earnings, the Shiller P/E ratio is based on inflation-adjusted earnings per share (EPS) over the previous 10 years. It's meant to give a more balanced view, accounting for temporary slumps or booms that could be misleading.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool