The Famous Shiller PE Ratio Is Predicting Positive Returns For The Stock Market

The Shiller P/E ratio, or the cyclically-adjusted price-earnings ratio, is one of the most popular yet most misused measures of stock market value. It's calculated by taking the S&P 500 and dividing it by the average of ten years worth of earnings. If the ratio is above the long-term average of around 16, the stock market is considered expensive. Currently, the Shiller P/E is at 24. While this certainly looks expensive, it would be a mistake to assume that stocks are doomed to crash until the ra...