This week, I want to bring your attention to a key piece of research from J.P. Morgan: their latest Guide to the Markets report. It offers useful perspective on where equity valuations stand, what history suggests about future returns, and what it might mean for you and your portfolio.
What the data show
J.P. Morgan highlights that the forward price-to-earnings (P/E) ratio for the S&P 500 sits around 22.8×, compared with a 30-year average of roughly 17×. They also show charts illustrating the historical relationship between valuation levels and future equity performance. The key takeaway: when markets have traded at these elevated P/E levels, the predicted five-year annualized returns have averaged close to 0%.
While that doesn’t guarantee poor performance ahead, it does suggest that potential upside may be limited, and that the margin for error is smaller than usual.
The implications, should you consider taking gains?
Given the above, several questions are worth asking:
- If valuations are above historical averages, are future returns already “priced in”?
- If you’ve had strong gains in your stock portfolio, might now be a prudent moment to lock in some of those gains?
- Alternatively, are your holdings still well-positioned for your long-term goals despite the high valuations
Here are a few thoughts to guide the decision:
- Align with your time horizon and risk tolerance.
Long-term investors can afford volatility, but investors closer to retirement have less
room for error. - Consider “taking chips off the table.”
If a few holdings now dominate your portfolio, trimming exposure and reallocating can
help manage risk. - Rebalance strategically.
Instead of trying to time the top, take partial profits and diversify into assets that provide
more predictable returns. - Stay mindful of valuation, but don’t be hostage to it.
Valuation is a useful guide, not a crystal ball. Over five-year horizons, elevated P/Es
have consistently led to muted returns.
My current investment offerings
At Eppler Capital Funds, we focus on helping investors achieve dependable, predictable
returns through private-market investments not tied to public equities. Current
opportunities include:- Promissory Note Fund – offers fixed returns up to 10% per year, backed by
secured notes in old-school cash cow businesses. - San Diego Real Estate Fund (MMTM VIII) – targets the housing shortage by
acquiring and improving residential properties with new ADUs. Projected ROI:
40%+ over 24 months with strong tax benefits. Closing 11/30/25. - Texas Oil & Gas JV (TSO Ten Well) – invests in proven-producing wells across
Texas, offering 20%+ IRRs and 65–75% first-year tax deductions on active
income. Closing 12/31/25.
- Promissory Note Fund – offers fixed returns up to 10% per year, backed by
Each of these options is designed to generate steady income, meaningful tax advantages, and/or diversified growth from traditional equity markets.
If you’d like to review your portfolio or learn more about these opportunities, I’d be happy to connect.
Schedule a Call With Me
