S&P 500 CAPE Ratio vs. U.S. Households Holding of Equities % Total Financial Assets

When everyone is piled into equities and valuations are stretched, there isn’t much cushion left. History doesn’t say a crash has to follow, but it does show that markets priced for perfection rarely handle surprises well.

Image: Topdown Charts

S&P 500 CAPE Ratio vs. U.S. Households Holding of Equities % Total Financial Assets