The S&P 500 Is Historically Expensive Now. Investing in This ETF Could Help You Hedge Against a Potential Crash.

Since the end of 2022, the S&P 500 (SNPINDEX: ^GSPC) -- an index tracking 500 of the largest public U.S. companies -- has been on a good run. Much of its rise in value during that period was fueled by investors' huge optimism about the artificial intelligence (AI) trend, with the tech-focused "Magnificent Seven" stocks accounting for the majority of the index's gains.The S&P 500's recovery from the 2022 downturn has been great for investors, but it's also a double-edged sword. The index now sits at historically high valuation levels -- in particular, its Shiller price-to-earnings (P/E) ratio, which measures stock prices against inflation-adjusted average earnings during the past 10 years. As of the time of this writing, the S&P 500's Shiller P/E ratio is almost 39, which is the highest since October 2000 -- right in the thick of the crash that followed the dot-com bubble.This isn't to sound the alarm, because there's no sure way to predict how the stock market will perform from here. However, it would be a good time to exercise some caution, because it hasn't worked out well in the past when the Shiller P/E Ratio has reached elevated levels.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool