Part 7/9:
Valuations are elevated, with the current P/E ratio on the S&P 500 around 30—double the historical average.
The top 15 market leaders show weak fundamentals in about 80% of cases, indicating potential froth and vulnerability to corrections.
While these factors introduce caution, they don’t necessarily signal impending disaster.
Why Staying Invested Matters
History shows that external reasons to sell—such as geopolitical crises, economic fears, or policy changes—have not led to long-term market declines when investors remained patient. For instance:
During major crises from 1985 to 1996, the market kept rising despite fears.
Over the past 15 years, passive investors who simply held the S&P 500 saw their money multiply sixfold.