07-10-2021, 01:01 PM
S&P 500P/E ratio DD, advice needed
<!-- SC_OFF --><div class="md"><p>So historically, the average P/E ratio for the S&P 500 has been 16</p> <p>It’s currently sitting at a whopping high of 46, pointing to the market being highly overvalued.</p> <p>P/E basically means how many years you’re willing to wait to make your money back if earnings were to stay the same. 46 years in this case, if earnings were not grow, but such high of a p/e ratio would still require a lot of growth which I think is not really sustainable at these levels.</p> <p>I haven’t had the chance to experience a bear market before, but I’d like to hear from some of the more experienced investors for what the best way one can hedge themselves for a correction without putting money into bonds?</p> <p>TLDR; Growth companies have enjoyed their run over the last 10+ years, but will they be able to justify it through earnings and maintain their pricing?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/PaulP97"> /u/PaulP97 </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/oh347o/sp_500pe_ratio_dd_advice_needed/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/oh347o/sp_500pe_ratio_dd_advice_needed/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>So historically, the average P/E ratio for the S&P 500 has been 16</p> <p>It’s currently sitting at a whopping high of 46, pointing to the market being highly overvalued.</p> <p>P/E basically means how many years you’re willing to wait to make your money back if earnings were to stay the same. 46 years in this case, if earnings were not grow, but such high of a p/e ratio would still require a lot of growth which I think is not really sustainable at these levels.</p> <p>I haven’t had the chance to experience a bear market before, but I’d like to hear from some of the more experienced investors for what the best way one can hedge themselves for a correction without putting money into bonds?</p> <p>TLDR; Growth companies have enjoyed their run over the last 10+ years, but will they be able to justify it through earnings and maintain their pricing?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/PaulP97"> /u/PaulP97 </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/oh347o/sp_500pe_ratio_dd_advice_needed/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/oh347o/sp_500pe_ratio_dd_advice_needed/">[comments]</a></span>Kind Regards R