Measure

CAPE

also called Shiller P/E · cyclically adjusted price-to-earnings

Definition

Price divided by the average of ten years of inflation-adjusted earnings.

How to read it

Smoothing a decade of earnings is intended to strip out the business cycle from the multiple.

What it does not tell you

Its relationship with subsequent returns is weak at short horizons and its level is not comparable across eras — accounting standards, buyback behaviour and sector composition have all changed the denominator's meaning.

Applied in 4 articles

2026-09-06 Can Valuation Predict Returns? Using CAPE and Earnings Yield as a Long-Horizon Compass
2026-04-16 VXUS vs VOO: Where Should You Invest in 2026?
2026-04-04 When to Stop Investing: The Art of Risk Management and Strategic Cash
2026-02-28 If the Nasdaq 100 Corrects 20%, Will Long-Term Investors Lose Money? (10+ Year Analysis)

Every figure computed with this measure on this site follows the conventions set out in the methodology. All measures →