Crossing
the Rubicon!
DYI: The U.S. stock market remains
massively overvalued – as of 8-17-2026 – with the Shiller PE at 42.56 along
with its tiny 1.00% dividend yield.
When the
starting Shiller PE (CAPE) ratio exceeds 30, subsequent S&P 500 total
returns historically drop sharply.
The next 10 years, annualized real returns average near 0% to
2% (often flat or slightly negative). Over the next 15 years, annualized real
returns improve slightly; roughly 3% to 5% as markets partially digest the high
valuations.
These nose bleed valuation no longer compete with alternative
asset categories. Vanguard’s Long-Term
Investment-Grade Fund Investor Shares (VWESX) current yield is 5.78%
significantly greater than Vanguard S&P 500 ETF (VOO) dividend yield at
1.00%! 478% greater yield this places
the S&P 500 index players into the unforgiving box of not just expecting
higher valuations; they are DEMANDING!
Even if you have decades to go before retirement don’t be
sucked into FOMO – Fear of Missing Out – that has so many speculating thinking
they are investing. Now is the time to
be far more concern than the return on your money – but the return OF YOUR
MONEY!
Those of you who are soon to retire (or are retired) using a
systematic withdraw from a stock fund the odds now favor poor returns going
forward depleting your hard earned money faster than a major league baseball picture.
Depending on age and health; annuities could very well enter into your finances as an excellent way to
pass off some of the risk in this high flying stock market.
Those of you who have more than 10 years to retirement ignore
annuities and concentrating on long term bonds (investment quality ONLY) along
with positions in silver and gold (follow Sentiment Changes) for any changes.
Use my model portfolio or simply as a guide (I’m not
offended) and lastly don’t forget whether retired or many years ahead The Permanent Portfolio symbol PRPFX is another great option!
Till Next Time
Disclaimer
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
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