Oddly enough, the Dow is still undervalued by 8% against its long-term inflation-adjusted average. What's more, the last bullish trend need not be over yet. Look at the following picture.
Forget P/E. It fails most miserably when you need it most. What really matters is to spot the long-term trend. If the markets is overpriced the way it was in the 1960's or in 1999, it's better to leave it alone for a decade or two. On the other hand, if the market is hugely undervalued the early 1980's style, buy, buy, and buy. Last time we experienced that situation in 2009, but still it need not be too late.
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