Market Health Dashboard
Last updated: February 11, 2026
What Am I Paying?
Valuation metrics tell you the price of admission. Expensive markets can still go up, but history says the starting price matters enormously for long-term returns.
Price / 10yr avg inflation-adjusted earnings
Total Market Cap / GDP
Price / trailing 12-month earnings
Earnings Yield minus 10yr Treasury yield
What Could Go Wrong?
Cycle and stress indicators. These are the early warning systems: the yield curve, credit markets, employment, and manufacturing. When these deteriorate together, pay attention.
10yr Treasury minus 2yr Treasury spread
Junk bond yield over Treasuries (OAS)
U.S. civilian unemployment rate
3-month avg rise above 12-month low
Purchasing Managers Index (50 = neutral)
What Is Everyone Else Doing?
Sentiment and positioning. These tell you about crowd behavior. Extreme greed is a yellow flag; extreme fear is usually an opportunity. The best time to buy is when nobody wants to.
Composite of 7 market indicators (0=Fear, 100=Greed)
S&P 500 implied volatility (fear gauge)
Weekly survey: bullish % minus bearish %
Total margin debt on NYSE (monthly, lagged ~6 weeks)
The Backdrop
These don't fit neatly into a single category but provide essential context for interpreting everything above.
Federal Reserve target rate
% of S&P 500 market cap in top 10 stocks
Near-record concentration. Buying the index is increasingly a bet on a handful of tech stocks.
CAPE Ratio: The Full Picture
The CAPE ratio is the cornerstone valuation metric. Below is the deep analysis: historical context, forward return estimates, and the allocation framework.
Reading the Signal
At the current CAPE of 40.36, the market is more expensive than 98.7% of all historical readings since 1881. The long-run average is 17.8. The all-time high was 44.2 in 1999-02, during the dot-com bubble.
1/CAPE -- what stocks "pay" you
Risk-free alternative
Stocks vs. bonds premium
Current index level
Based on the Howard Marks-inspired valuation framework. At CAPE 40.4, the model suggests a 25% stock / 75% bond split.
Two Schools of Thought
When markets are cheap, be aggressive. When they're expensive, be defensive. The allocation table above shifts equity exposure from 90% down to 25% depending on where the CAPE ratio sits. More work, but historically better risk-adjusted returns.
Read the full backtestPick an allocation (Nevada runs roughly 75/25), rebalance once a year, ignore the noise. No tactical adjustments, no valuation calls. Simple, tax-efficient, and it beats most active managers over the long run.
Read the case studyBoth approaches have merit. The right one depends on your temperament, tax situation, and whether you trust yourself to rebalance without emotion.
CAPE Ratio Since 1881
Over 140 years of market valuation data. The green dashed line shows the long-run average of 17.8. Hover over the chart for details at any point in history.
What You Pay Determines What You Get
Each dot represents a month in history. The x-axis shows the CAPE ratio at the time of investment; the y-axis shows the actual 10-year real return from that point. The regression line (R2 = 0.737) explains nearly 74% of the variation. The star marks where we are today.
Howard Marks-Inspired Allocation Table
A systematic approach to adjusting equity exposure based on market valuations. The highlighted row shows where we are today.
| CAPE Range | Market Condition | Expected 10yr Return | Equity Allocation | |
|---|---|---|---|---|
| 0 - 12 | Screaming Buy | 15%+ | | |
| 12 - 16 | Very Attractive | 12% | | |
| 16 - 20 | Attractive | 10% | | |
| 20 - 25 | Fair Value | 8% | | |
| 25 - 30 | Expensive | 6% | | |
| 30 - 35 | Very Expensive | 4% | | |
| 35+ | Bubble Territory | 2% | | You are here |
What Happened Before
Previous periods when the CAPE ratio was near today's level, and the actual 10-year real returns that followed.
The Analysis Behind This Dashboard
Testing Valuation-Based Investing: What the Data Actually Shows
The full backtest of a Howard Marks-inspired strategy that adjusts equity allocation based on CAPE. Includes the regression analysis, allocation table, and 34-year performance comparison.
Read the analysisThe Nevada Pension Experiment
How Nevada's 2-person pension fund beats CalPERS' 400+ staff with a dead-simple index allocation and near-zero fees. The case for simplicity.
Read the case studyImportant Disclaimer
This dashboard is for educational purposes only. It is not investment advice. These indicators provide context, not predictions. Markets can remain irrational longer than you can remain solvent. Past performance does not guarantee future results. The CAPE ratio and other metrics have well-documented limitations. Always consult a qualified financial advisor before making investment decisions.
Methodology & Sources
CAPE (Cyclically Adjusted P/E): Current S&P 500 price divided by the average of the past 10 years of inflation-adjusted earnings. Developed by Robert Shiller.
Implied Return: Based on the regression formula: 10yr return = -0.327 x CAPE + 15.42 (R2 = 0.737).
Cycle Indicators: Yield curve, credit spreads, unemployment, and ISM PMI sourced from the Federal Reserve Economic Data (FRED).
Sentiment: CNN Fear & Greed Index, VIX from FRED, AAII Investor Sentiment Survey.
Signal Logic: Each indicator is classified as green (healthy), yellow (caution), or red (warning) based on historical ranges and context. The overall signal reflects the weight of evidence across all indicators.
Data Sources
- Robert Shiller's Dataset (Yale) -- Historical CAPE data since 1881
- Federal Reserve Economic Data (FRED) -- Treasury yields, VIX, unemployment, credit spreads, fed funds rate
- multpl.com -- Current CAPE and P/E updates
- CNN Business -- Fear & Greed Index
- Data updated daily via automated pipeline. Last update: February 11, 2026.
Want the Full Analysis?
Read the detailed backtest that powers this dashboard, or explore all of my writing on investing, building, and strategic thinking.