Real S&P 500 Total Return Price with TRCAPE Valuation - Monthly
Chart Description
This chart uses the TRCAPE stock valuation measure shown in Real S&P 500 TRCAPE - Monthly to apply colored valuation indicators to the real (inflation adjusted) S&P 500 total return price shown in Real S&P 500 Total Return Price - Monthly. Times in which TRCAPE is more than a standard deviation above/below its average are considered over/undervalued, and times in which TRCAPE is more than two standard deviations above/below its average are considered extremely over/undervalued. This chart shows that TRCAPE has done a pretty good job historically of identifying major stock market peaks/valleys as over/undervalued. This chart is also pretty similar to Real S&P 500 with CAPE Valuation - Monthly suggesting that dividends haven't had a great impact historically on this valuation measure. This chart also shows valuation of the current stock market according this measure.
Relevant Links
mccormick-charts.com: Real S&P 500 TRCAPE - Monthly, Real S&P 500 Total Return Price - Monthly, Real S&P 500 with CAPE Valuation - Monthly
Wikipedia: cyclically adjusted price-to-earnings ratio
