1. The stock market is believed to be tracing out the extended peak of the third great speculative bubble in U.S. history, with valuation measures more extreme than both the 1929 and 2000 market peaks. 2. The equal-weighted S&P 500 has returned less than 2.4% since the initial January 2022 market peak, while the small-cap Russell 2000 has lagged T-bills by more than -10.6%. 3. Valuations are informative about long-term returns but not reliable for short-term outcomes, as investor psychology significantly impacts short-term market performance.
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