Overview
- The S&P 500 rose nearly 17% year to date through Dec. 5, with the Nasdaq up about 22.1% and the Dow up 12.7%.
- Investors have been buoyed by expected Fed rate cuts, better-than-anticipated earnings, and enthusiasm for technologies such as AI and quantum computing.
- Despite the index nearing a potential record around 6,900, a valuation measure cited in the report and back-tested to January 1871 points to a tougher 2026 for the S&P 500.
- The piece underscores that no indicator offers certain forecasts and notes the limits of common tools like the P/E ratio, which can mislead during downturns or when growth differs.
- For long-term investors, the article frames pullbacks as opportunities, noting $5,000 invested in the S&P 500 15 years ago would now exceed $28,000, a compound return above 12% annually.