=== SUMMARY ===
- The author compares the "P/E ratio" of 3-month T-bills and 10-year notes to the S&P 500, arguing that US equities are currently overvalued relative to risk-free yields.
- Due to high valuations in US broad market and value funds, the author has shifted their retirement portfolio entirely into international equities and bonds.
- Quality assessment: Macro observation and personal portfolio positioning based on basic relative valuation metrics; leans toward opinion rather than deep fundamental DD.
=== SENTIMENT ===
BEARISH
=== TRADE IDEAS ===
SPY - AVOID | confidence: 0.85 | sentiment: -0.70
Speaker: u/Southern-Equal-6014
Thesis:
1. THE FACT: The S&P 500 has a P/E of 29.5, which is higher than the P/E equivalent of a 3-month T-bill (26.31) and a 10-year note (21.1).
2. THE BRIDGE: The lack of an adequate equity risk premium makes broad US market index funds unattractive compared to safer alternatives.
3. THE VERDICT: Avoid US broad market funds due to stretched valuations and poor relative yield.
4. RISKS: High inflation driving nominal earnings growth could sustain or push US equity valuations higher.
Timeframe: medium-term
Key Points:
- S&P 500 P/E at 29.5 is historically expensive.
- Equity risk premium is virtually non-existent.
- Hard to justify owning US index funds at these levels.
VXUS - LONG | confidence: 0.80 | sentiment: +0.50
Speaker: u/Southern-Equal-6014
Thesis:
1. THE FACT: US equities and even US value funds are trading at elevated P/E ratios.
2. THE BRIDGE: International markets offer better relative value compared to the overvalued US domestic market.
3. THE VERDICT: Allocate capital to international equity funds for better value.
4. RISKS: Global macroeconomic slowdown could drag down international equities regardless of valuation.
Timeframe: long-term
Key Points:
- Author moved TSP allocation to international.
- US value funds are priced like total market funds.
- International offers a refuge from US overvaluation.
TLT - LONG
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▶ Полный текст поста
At a yield of 3.8%, the 3 month T bill has a P/E of 26.31, the 10 year note has a 21.1 P/E. The S&P 500 has a P/E of 29.5.
There's still value out there but attractive company prices are rare and it's getting harder and harder to justify owning funds. Even in my TSP I'm only in international and bonds. I have some value and small value funds but their P/E and yield are what you'd expect from a total market fund not value funds. I don't understand what people are thinking. My only thought is inflation, which is quite high, is showing up in earnings growth and driving enthusiasm.
US equities and even US value funds are trading at elevated P/E ratios. International markets offer better relative value compared to the overvalued US domestic market. Allocate capital to international equity funds for better value. Global macroeconomic slowdown could drag down international equities regardless of valuation.
The S&P 500 has a P/E of 29.5, which is higher than the P/E equivalent of a 3-month T-bill (26.31) and a 10-year note (21.1). The lack of an adequate equity risk premium makes broad US market index funds unattractive compared to safer alternatives. Avoid US broad market funds due to stretched valuations and poor relative yield. High inflation driving nominal earnings growth could sustain or push US equity valuations higher.
10-year notes offer a P/E equivalent of 21.1, and 3-month T-bills offer 26.31. Bonds provide a better or comparable earnings yield to the S&P 500 but with significantly lower risk. Shift allocation into bonds to capture yield while avoiding US equity downside. Persistent high inflation could erode real returns on fixed income.
This Reddit post, published August 28, 2026,
features u/Southern-Equal-6014
discussing VXUS, SPY, TLT.
3 trade ideas extracted by AI with direction and confidence scoring.