S&P 500 P/E Ratios Within 20 Percent Of Index At A 20 Year High

The percentage of S&P 500 stocks with P/E ratios within 20 percent of the index is at a twenty year high, and there is evidence that investors are relying too heavily on benchmarking and ETFs, argues BMO Chief Investment Strategist Brian G. Belski in a recent report. He thinks this gives more active investors an opportunity to incorporate fundamentals into their investment decisions and find deals that other people overlook.

S&P 500 stock performance

“The year-to-date performance of stocks with the lowest price multiples has dramatically outperformed the overall market,” writes Belski. “As QE has driven stock prices higher, investors have sought out more attractively priced areas of the market. The result has been a surge in...