The author argues that high S&P 500 valuations imply low future returns and recommends reducing S&P 500 dependence in 2026 in favor of cheaper P/E stock markets.
Unpriced research observations (excluded from Calls and Returns):
SPX — AVOID The author argues that the S&P 500's high P/E ratio implies low single-digit returns in upcoming years and advises reducing portfolio dependence on it for 2026. The mechanism is valuation mean reversion: historically when the S&P 500 P/E has been this high, forward returns were low. The suggested horizon is 2026. Exact non-equity contract requires separate historical validation; no generic proxy.
it would probably look wise to reduce a portfolio dependency on the S&P500 for 2026 and look for more of other stock indices.