1. The S&P 500 is historically expensive with high PE and price-to-sales ratios, suggesting lower future returns for index fund investors. 2. Current PE and price-to-sales ratios exceed those of the dot-com and COVID bubbles when adjusted for growth rates. 3. Dividend yields are near historical lows, indicating the market's overvaluation compared to historical norms and the 10-year Treasury yield. 4. Stock selection is crucial as high valuations imply lower future returns, especially for buy-and-hold investors and index fund participants.