S&P Composite 1500‘s CAPE ratio

The CAPE ratio for the S&P Composite 1500 assesses the valuation of a broad range of U.S. stocks by comparing current prices to inflation-adjusted earnings averaged over the past 10 years. This index combines large-cap (S&P 500), mid-cap (S&P 400), and small-cap (S&P 600) companies, providing a comprehensive market view. By smoothing out short-term earnings volatility, the CAPE ratio helps investors evaluate whether the overall market is overvalued or undervalued compared to historical trends. A high CAPE suggests overvaluation and potential lower future returns, while a low CAPE indicates undervaluation and possibly higher returns, aiding strategic investment decisions.