The market isn’t cheap right now. It’s just less expensive.
u/ValueEquities ·
Reddit — r/investing
· March 27, 2026 at 23:26
· ⬆ 275 pts
· 💬 56 comments
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Summary
The post discusses current S&P 500 valuation metrics (trailing and forward P/E), arguing they remain historically high.
The author's thesis is that the market is not cheap or undervalued; it is merely less expensive than its 2021-2022 peak. High multiples imply optimistic earnings growth expectations that may not materialize.
Quality assessment: Opinion / Speculation. The post presents a common valuation perspective but does not include deep original research or data beyond standard P/E ratios.
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The market isn’t cheap right now. It’s just less expensive.
S&P 500 right now:
• \~25–26x trailing P/E
• \~20–21x forward P/E
Both are still well above long-term historical averages. Yeah, it’s come down from the 2021–2022 insanity, but “cheap” or “undervalued” is a massive stretch.
Every time the market dips a bit, you see the same posts: “This is the buy of the century!” “Stocks are on sale!” Nah. We’re still paying a premium. The forward multiple being 20–21x means investors are baking in pretty heroic earnings growth for the next 12–24 months. If that growth doesn’t show up (or rates stay higher for longer), we’re going to feel it.
I’m not saying crash incoming or anything dramatic. Just pointing out that calling current levels “undervalued” is coping. It’s less expensive than last year, sure. Cheap? Not even close.
What do you think? Are we in a permanent higher-valuation regime because of AI/tech, or is this still rich by any reasonable standard? Curious to hear the bull case that actually justifies 25x trailing.
S&P 500 forward P/E of 20-21x and trailing P/E of 25-26x are well above long-term historical averages. These elevated multiples are pricing in "heroic" future earnings growth. If growth disappoints or interest rates remain high, the market is vulnerable to a de-rating or decline. The market is not undervalued and remains at a premium, suggesting a cautious approach rather than aggressive buying. Earnings growth could meet or exceed high expectations, or a shift in monetary policy (lower rates) could justify higher multiples, sustaining the current valuation regime.
This Reddit post, published March 27, 2026,
features u/ValueEquities
discussing SPY.
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