Are you an investment sleuth? Do you like to delve deep into financial metrics to better understand the market? If you’re someone who is looking for a long-term valuation of the market adjusted for inflation, we know a financial metric for you.

For this episode, we spoke with AAII Journal editor Charles Rotblut, CFA, about his latest article on the cyclically adjusted price-earnings (CAPE) ratio and why using the CAPE ratio during high inflation can give individual investors insights into expected market returns over the next five to 10 years by looking back 10 years into the past.

Listen to this episode and learn:

• What the CAPE ratio is and what it entails

• How to effectively use the CAPE ratio to invest with confidence

• When to use the CAPE ratio in order to analyze the long-term value of the market

Charles Rotblut, CFA, is the creator of the PRISM Wealth-Building Process and Academy. He is also a financial analyst, vice president and AAII Journal editor. Jenna Brashear is a finance writer, podcast host and community manager at AAII.

Additional Resources

CAPE Ratio Is High, but Down From Peak

Online Exclusive: Delving Into the Definition of the CAPE Ratio

Valuations, Inflation and Real Returns, an interview with Robert Shiller

A Cautionary Note About Robert Shiller's CAPE

AAII Stock Screening Community

AAII Journal July 2022 Issue

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Individual Investor Show: Utilizing the CAPE Ratio During Inflationary Periods | AAII