The only time it was lower was during the dot-com bubble in 2000.
What does that mean in simple terms?
It means investors are paying very high prices for every dollar of corporate earnings.
The lower the earnings yield, the higher the valuations… and the smaller the margin of safety.
But does that mean a crash is imminent?
Not necessarily.
Let’s look at the situation objectively:
First: Markets can remain highly valued for extended periods, especially when momentum is strong.
Second: Today’s environment is partially different from 2000.
Companies today — particularly in technology and artificial intelligence — are generating real profits and strong cash flows, not just future promises.
Third: Elevated valuations imply one critical thing:
Any negative surprise in earnings or liquidity could trigger a sharp repricing.
The risk does not lie in the rise itself…
but in the fragility of expectations.
When the market becomes historically expensive, it shifts from a phase of easy rewards to a phase that truly tests investment discipline.
The fundamental question today is not:
Is the market expensive?
But rather:
Is future growth strong enough to justify these prices?
