Shiller P/E hits dot‑com era high; investors weigh crash risk

Since its trough on Oct. 12, 2022, the S&P 500 is up over 91%. As of the beginning of October, the Shiller P/E ratio was 40.7, the highest it has been since the dot-com bubble; the ratio stayed above that mark for most of 1999 through mid-2000. Unfortunately, we know how the dot-com bubble ended: The S&P 500 fell around 49% between March and October 2022. The article notes crashes are inevitable and vary widely in length and severity. The COVID-19 crash lasted 33 days and saw the market drop around 34%, while the dot-com crash lasted about 929 days. A crash can be a buying opportunity for long-term investors, but those nearing or in retirement should prioritize proper allocation and a cash cushion to avoid forced selling.