top of page

CIO Thoughts: Have We Reached Peak Sentiment?

Should you be worried about a high CAPE ratio?

A recent article in Advisor Perspectives highlighted how high CAPE ratios have historically resulted in low S&P 500 returns.

The Shiller PE ratio is something that is fiercely debated in the investment community. My takeaway:

  • Don't obsess over it but keep it in the big picture.

  • It's a great tool to assess the state of affairs with regards to valuations, but hard to manage portfolios as it is not great at timing.

  • There are more effective valuation and risk management techniques that better serve for managing portfolios.

  • The larger concern that I have for markets is that we have likely reached peak sentiment.

What is the catalyst to take markets higher when we have:

  1. Full Valuations

  2. Peak Sentiment

  3. Allocations at all time highs

  4. Earnings growth & macro data have skyrocketed off of the March 2020 lows

See the following tweets that I have sent out in recent weeks:


Astoria Portfolio Advisors

Astoria Portfolio Advisors Disclosure: Any third-party websites provided on are strictly for informational purposes and for convenience. These third-party websites are publicly available and do not belong to Astoria Portfolio Advisors LLC. We do not administer the content or control it. We cannot be held liable for the accuracy, time sensitive nature, or viability of any information shown on these sites. The material in these links is not intended to be relied upon as a forecast or investment advice by Astoria Portfolio Advisors LLC, and does not constitute a recommendation, offer, or solicitation for any security or any investment strategy. The appearance of such third-party material on our website does not imply our endorsement of the third-party website. We are not responsible for your use of the linked site or its content. Once you leave Astoria Portfolio Advisors LLC's website, you will be subject to the terms of use and privacy policies of the third-party website. Refer here for more details.


bottom of page