Shiller’s CAPE and long-term S&P returns

We can also plot the decade ahead S&P 500 return vs cyclically adjusted price earnings today to see if Shiller’s CAPE provides a lead indicator of future returns.

This shows Shiller’s CAPE on the x-axis and S&P 500 return over the following decade on the y axis. The vertical red line is the most current value of Shiller CAPE.

CAPE vs Decade Return