Commentary

Is CAPE fear warranted?

This vaunted valuation metric is useful, but it’s not destiny.

By: Denise Chisholm

Updated: 11/20/2025

Key Takeaways

Denise Chisholm approaches her research by looking at market data through a historian's lens. She believes historical patterns, when considered in the appropriate context, can help investors build conviction about future trends. This month, Denise looks at how high CAPE ratios don’t guarantee weak long-term returns—historically, crises have mattered more than valuations, and today’s elevated CAPE reflects structural shifts in the market.

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Is CAPE fear warranted?

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Is CAPE fear warranted?

This vaunted valuation metric is useful, but it’s not destiny.

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