CAPE Fear: Valuation Ratios and Market Timing – Oct. 2014

As recent record highs of broad market indices such as the S&P 500 set last quarter disappeared in the past few weeks together with most equity returns for 2014, many investors are apprehensive.
DOWNLOADThey fear further major declines are likely to continue and are eager to find strategies that promise to avoid the pain of an extended downturn while preserving the opportunity to profit in up markets. One approach that has attracted considerable attention in recent years is adjusting investments based on the CAPE ratio — the Cyclically Adjusted Price/Earnings ratio.