The Last Time the Stock Market Was This Expensive, It Dropped Nearly 50%.

The CAPE ratio reached 39.2 in February, a valuation level last seen before the dot‑com bubble. Historically, that prior peak preceded a 49% decline in the index over the next two-and-a-half years, signaling elevated downside risk for broad equities and suggesting a cautious stance on market exposure.

Analysis

The CAPE ratio reached 39.2 in February, a valuation level last seen before the dot‑com bubble. Historically, that prior peak preceded a 49% decline in the index over the next two-and-a-half years, signaling elevated downside risk for broad equities and suggesting a cautious stance on market exposure.