SPY
📈 The SP500’s forward P/E ratio is high at 21.5x earnings, but justified by the strong growth of the ‘Magnificent Seven’.
📊 Historical comparisons show current valuations are supported by higher profitability compared to the dot-com bubble and financial crisis.
🛡️ Despite potential short-term volatility, long-term investment in the SP500 remains highly likely to generate positive returns.
💰 Passive investment strategies continue to outperform active management, even with market concentration in a few large companies.
@Javierlinares:
“The SP500’s forward P/E ratio closed 2024 at 21.5 times earnings, indicating that investors are paying 21.5 times the current earnings for an average stock in the SP500. This high valuation has been consistent since 2020, but it’s supported by the earnings growth of the ‘Magnificent Seven’. Unlike the dot-com bubble, where 28% of companies were unprofitable, today only 7% are. Despite potential short-term corrections, long-term investment in the SP500 remains a sound strategy.”
Watch the exact part of the video where Javier talks about SP500 here:
Watch the video on YouTube.
Read more articles by the world’s top 100 analysts on SP500 (SPY) at the following link. SPY stock.
