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Given the unprecedented economic situation that has unfolded due to the pandemic, it is difficult to use standard valuation metrics to check the health of stocks, but TPA believes that it is worth a try. The charts below look at the ratio of Price to forward EPS and Price to Book Value of the S&P500 and the Russell 3000 (representing 98% of all publicly traded U.S. stocks) over the past 25 years to take a temperature of the current market. Below the valuation measures, TPA has provided the price chart of the indexes.

No matter how TPA examines the data, the patient seems to be running a fever.

Charts below ....

· S&P 500 Forward P/E is over 25. The only time in the past 25 years that forward P/E was this high was 1999 – 2000.

· Russell 3000 Forward P/E is over 27, after briefly moving to a record high of 29.19 this year. Again, the last time Forward P/E was this high for all U.S. stocks was 1999-2000.

· S&P500 Price/Book Value is 3.89, which is more than twice the lows in 2009 of 1.52. This is lower than the extremes reached in early 2000, but equal to the levels that still existed in 2001, when there was still nearly 12 months left to go in the 2000 to 2002 decline.

· The Russell 3000 Price to Book Value is 3.7. Again, this is more than twice the lows of 2009, but less than the 2000 extremes.

Even if clients are not nervous about the historical valuation levels that currently exist in the market, they should realize that stocks are far from historically opportunistic at the current levels.

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