After racking up a staggering 85% return over the past three years, the S&P 500 is riding a wave of momentum—but its valuation levels now echo the dot-com era, raising questions about whether long-term returns could once again disappoint.
As of today, the S&P 500 Index – as tracked by the Vanguard S&P 500 ETF (NYSE:VOO) – is trading at a forward price-to-earnings ratio of approximately 23—meaning investors are paying 23 times expected earnings over the next 12 months.
