Stock Market Returns Using the CAPE Calculator
Yale University economist Robert Shiller developed the cyclically adjusted price-to-earnings ratio, CAPE, as a valuation measure for the broad stock market. Using S&P 500 monthly price and earnings data from Shiller and found at Quandl, CAPE averages ten years of real earnings instead of the usual one year in the conventual price-to-earnings ratio. CAPE tends to smooth out periodic excesses in earnings.
The current CAPE is 30.07. The average, low and high CAPE values from January 1881 to the present are: 16.97, 4.78 (December 1920) and 44.20 (December 1999).
Use the CAPE Calculator to analyze the possible direction of stock prices and average returns given a selected CAPE. The calculator uses historical monthly prices and CAPE values from the Shiller CAPE data to compute the percentage of positive returns and the average return for one-, five-, ten- and twenty-year periods.
You can enter any CAPE that is greater than zero. Press the Calculate button and the calculator displays the results for the selected CAPE and the average CAPE for the entire series of values.