S&P 500: Seriously?

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Okay, so everyone’s all excited about the S&P 500. Ninety percent return in three years? Please. It’s like they’ve never seen a bull market before. And now they’re talking about the “Magnificent Seven” and AI? It’s a bubble, I’m telling you. A perfectly predictable, infuriating bubble. It’s not about innovation; it’s about people not remembering what happened last time. They’re just throwing money at anything with a ‘tech’ label. It’s…unsophisticated.

But here’s the thing. The market is always evolving, right? Like, you think you’ve got a handle on it, and then suddenly the labor market slows down, inflation refuses to cooperate, and everyone starts acting like valuations don’t matter. The Vanguard S&P 500 ETF (VOO +0.16%) is trading at a P/E of 28. Twenty-eight! It’s practically begging for a correction. And nobody seems to care. It’s like they’re deliberately trying to recreate 2000. It’s… irresponsible.

So, is it worth investing in? Let’s break it down, because apparently, logic has left the building. I need a spreadsheet for this. And a strong cup of coffee. This is going to be painful.

1. Earnings: The Bare Minimum

Look, earnings are important. I get it. It’s not rocket science. If companies actually make money, that’s generally a good sign. FactSet says S&P 500 earnings are up 12.4% this year, and projected to be up 14.7% next year. Fine. But what happens when that growth slows down? What then? Everyone panics, that’s what. It’s a basic principle of…everything. And of course, it’s all driven by the same seven companies. Diversification? What’s that?

2. Valuations: A Collective Delusion

People say high P/E ratios have to come down. You think? It’s like saying water is wet. But they also think they can stay high as long as earnings keep growing. It’s circular logic! It’s like they’re trying to justify the insanity. If inflation stays under control and the job market holds up, maybe. Maybe. But it feels like everyone’s just waiting for the other shoe to drop. And honestly, I’m starting to feel a little anxious just thinking about it.

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3. Quality: The Illusion of Safety

In a downturn, investors flock to “quality.” Strong cash flow, healthy balance sheets, the whole thing. The Magnificent Seven check those boxes. They’re spending billions on AI, which, let’s be honest, is mostly hype at this point. But it’s enough to make people feel secure. The problem is, the S&P 500 is so top-heavy, it’s like building a house of cards. One wrong move, and the whole thing comes crashing down. It’s just…precarious.

4. Rate Cuts: A Fleeting Hope

The Fed might cut rates. Maybe. They were supposed to cut rates four times this year. Now it’s down to one or two. It’s like they’re making it up as they go along. A modest rate cut might give stocks a little boost, but it’s not going to solve any fundamental problems. It’s like putting a band-aid on a broken leg. It’s just…insufficient.

Still a Buy? I’m Seriously Questioning Everything

Investing in the S&P 500 today is risky. Concentration is high, valuations are absurd, geopolitical tensions are rising, and consumer spending is unsustainable. And yet, everyone’s still buying. It’s like they’re deliberately ignoring all the warning signs. But if your base case is no recession, and no unexpected shocks, then, fine, maybe it’s still a buy. Earnings growth is okay, GDP is around 4%, and unemployment is low. But it feels…fragile. It’s like balancing a stack of plates. One wrong move, and it’s all over. And honestly, I’m starting to get a headache just thinking about it. I need a nap. And a new financial advisor.

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2026-02-03 17:33