In recent weeks, much has been made about extended valuations, with reports noting that the Shiller P/E ratio is the highest since the dot-com bubble.[1]
But is valuation really a reliable gauge?
History suggests otherwise. Since the mid-1990s, investors have repeatedly been warned about high valuations. Those who acted on these warnings often missed out on significant gains.
The Truth About Margin Debt
Margin debt has also made headlines this year. In August, the story was that margin debt reached a record high. Was that true? Yes and no.
In absolute dollars, yes. But in context, when measured against the size of the overall market, it’s far from a record. Margin debt today equals about 1.8% of market cap, compared to the all-time high of 3.3% in 2008.[2]
The Bigger Picture
Headlines often mislead when taken out of context. Most are written to grab attention, not to guide smart decisions.
My advice remains the same: tune out the noise and stay focused on the plan we’ve built together. And if something you read or hear leaves you uncertain, please reach out — I’m always here to provide perspective.
©Behavioral Finance Network
Sources:
1. Business Insider, The Shiller P/E ration just hit its highest level since the dot-com bubble. Theron Mohamed, September 24, 2005
2. The Compound Insider, September 16, 2025.
The Hatlestad Group is an independent wealth management firm based in Edina, Minnesota, primarily serving successful head-of-household women, late-career executives, and pre-retirees. With a tailored approach to fee-only comprehensive wealth management, they empower clients to live out their next chapter with vision, wisdom, and resources, creating a purposeful and meaningful future. They can be reached by phone at (763) 259-3637, via email at info@thehatlestadgroup.com, or by visiting their website at thehatlestadgroup.com.
The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.