What happened the last time the S&P 500's forward P/E was this high

Core Viewpoint - Stock market valuations are currently high, with the forward price-earnings (P/E) multiple for the S&P 500 at 22.9x, significantly above its 10-year average of 18.6x [1][2] Valuation Insights - Valuation ratios, such as forward P/E, are not reliable predictors of short-term price movements, although they may provide some insight into long-term returns [2] - The current forward P/E of 22.9x is comparable to its peak of 23.6x in August 2020, when the S&P 500 was trading around 3,500 [3][4] Market Performance - The S&P 500 has nearly doubled in value over the past five years, rising to approximately 6,900, driven by a doubling of earnings alongside stable P/E ratios [4][5] - Despite significant market fluctuations, including a bear market in 2022 and a 19% decline at the beginning of 2023, many investors struggle with market timing [6] Future Outlook - Potential scenarios include a market correction that lowers stock prices and P/E multiples, sustained high valuations, or a situation where stock prices rise while P/E multiples decrease due to higher earnings [7] - Earnings are expected to grow at a double-digit rate through at least 2027, which is a critical factor influencing long-term stock prices [9]