- Articles - 2017 - Blog - S&P500 PE Ratio History - Historical Price to Earnings Ratio
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S&P500 PE Ratio History
Historical Price to Earnings Ratio of Standard and Poor's 500 Index
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Historical PE Ratio Chart   -    S&P500 as of March 29, 2017   Favorite Charts & Graphs  - More Articles 

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March 29, 2017:  Currently, the PE ratio for the S&P500 remains at an historically high level.  The S&P500 came very close to having zero earnings at the peak of the financial crisis which gave a huge spike in the PE ratio.   When you divide stock price by nearly zero earnings, you get a very, very high PE.  Today the markets have great earnings but they come at a high price.

From Chartoftheday.com1
"With fourth-quarter earnings largely in the books, today's chart provides some perspective on how the current earnings environment relates to the stock market, today's chart illustrates the price to earnings ratio (PE ratio) from 1900 to present. Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1900 into the mid-1990s, the PE ratio tended to peak in the low to mid-20s (red line) and trough somewhere around seven (green line). Notice how most PE ratio peaks that occurred well above the upper threshold (red line) were a result of a massive bear market / recession. The only real exception to this was the dot-com boom which resulted in a PE ratio peak well above 30 in 1999 (even then, the PE ratio did not stay above 25 for long). Viewed in this way, the current PE ratio (25.0) is noteworthy and suggests that the stock market as a whole is by no means cheap."

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