When Markets Dance on a Knife’s Edge: A Wealth Builder’s Confession

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2025 was the year where my therapist charged me in crypto and the S&P 500 gained 16%. Coincidence? Probably. But let’s not pretend we’re not all just a little bit drunk on the idea of “eternal bull markets.” The Dow, S&P 500, and Nasdaq all had their best three-year stretch since the Carter administration. Three years. That’s how long it took for us to forget the 2022 bear market. Classy move, humans.

Wall Street’s current serotonin drip-interest rate cuts, AI, quantum computing, and the U.S. economy’s stubborn refusal to die-has us all humming “We Are the Champions.” But here’s the thing about serenity: it’s usually the calm before someone throws a lit match into a gas station.

History doesn’t care about your retirement plans. It’s written in blood and candlestick charts. And right now, we’re staring at a 155-year-old warning sign that’s only blinked three times. Let’s call it the stock market’s version of a “Do Not Enter” sign written in invisible ink-and we’re all wearing white shirts.

This Has Only Happened Three Times. Three. Since 1871.

Valuations are the stock market’s version of a dating profile. Everyone says they’re “looking for a serious relationship,” but when you ask them to commit to a 10-year EPS average, they ghost. The Shiller P/E Ratio is the exorcist trying to make sense of this chaos. It’s not perfect, but it’s less likely to get distracted by a CEO’s PowerPoint on NFTs.

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The Shiller P/E isn’t some Wall Street wizard’s secret sauce-it’s math, inflation-adjusted, and decade-spanning. It’s the financial equivalent of asking your ex for a favor while also demanding they text you back within five minutes. Brutal, but honest.

Most investors cling to the traditional P/E ratio like it’s a life raft. But when earnings go negative (hello, 2008), that raft becomes a sponge. The Shiller P/E? That’s the luxury yacht. It smooths out the bumps, averages the chaos, and lets you sip champagne while the storm rages outside.

Since 1871, the Shiller P/E has averaged 17.33. We’ve spent the last 30 years in a fever dream above that number. Why? Because the internet made everyone a “day trader,” and the Fed handed out free money like it was confetti. Valuations went from “meh” to “I’ll take it to Vegas and double down.”

S&P 500 Shiller PE Ratio hits 2nd highest level in history 🚨 The highest was the Dot Com Bubble 🤯 pic.twitter.com/Lx634H7xKa

Barchart (@Barchart) December 28, 2025

As of January 7, 2026, the Shiller P/E is at 40.67. That’s not a typo. It’s a cry for help. And it’s only the third time in 155 years this has happened during a bull market:

  • 1999-2000: The Shiller P/E peaked at 44.19. Then the dot-com bubble burst. The Nasdaq lost 78%. I still have nightmares about buying Pets.com shares.
  • January 2022: The Shiller P/E crested 40. Then came the bear market. The S&P 500 shed 25%. My portfolio and I had a screaming match. We haven’t spoken since.
  • October 2025-present: The Shiller P/E is dancing between 39 and 41. Like a drunkard on a tightrope. Or me on a Monday.

The Shiller P/E isn’t a crystal ball. It’s more like a smoke alarm-it doesn’t tell you how to put out the fire, just that you’re about to burn down the house. And right now, the smoke is thick enough to choke a dragon.

Time Is the Only Investor Who Never Lies

History is a fickle lover. It rewards patience but punishes panic. The S&P 500 corrects once a year. That’s not a glitch-it’s the system. But here’s the kicker: bull markets last three times longer than bear markets. So when the market drops 10%, it’s not the end. It’s the discount bin at the mall of life.

According to Bespoke Investment Group, the average bear market lasts 9.5 months. A bull market? Two years and nine months. That’s the difference between a bad breakup and a Netflix series. So when the market screams, remember: it’s just auditioning for your next dollar.

But here’s the confession: I’m terrified. Every time the market dances near 40, I want to sell and buy a cabin in the woods. But I don’t. Because I’ve seen this movie. I’ve watched it play out in 1929, 2000, 2008, and 2022. And every time, the survivors were the ones who stayed seated through the credits.

So here’s my advice: Hold on. Clutch those stocks like a toddler clutches a security blanket. When the market screams, whisper back. And when it collapses, remember that the best buys in history often smell like panic and regret. Just don’t let me catch you crying over a Roth IRA.

And if all else fails? Pray to the Shiller P/E. It’s the only god who speaks in numbers. 🕯️

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2026-01-10 14:49