ALXN - 6 Industries That Are Historically Cheap Even With the Stock Market at an All-Time High
For investors, 2019 was the sort of year that dreams are made of. When the curtain finally closed, the benchmark S&P 500 had gained nearly 32%, inclusive of dividends paid, which is well over four times the historic average annual return of the index of 7%, inclusive of dividends and when adjusted for inflation.
Perhaps best of all, the good times have continued, with the S&P 500 hitting multiple new highs since 2020 began, including surpassing 3,300 for the first time ever.
But as the market has chugged ever higher, valuations for a number of popular stocks and industries have become extended. For example, the Shiller price-to-earnings ratio (i.e., the P/E ratio based on average inflation-adjusted earnings from the previous 10 years) is at its third-highest reading ever (31.83). The only other times the Shiller P/E has even topped 30 are just before the Great Depression, prior to the dot-com bubble, and prior to the fourth-quarter swoon in the market in 2018.