Price to 10 Year Inflation Adjusted Earnings

Popularized by Robert Shiller, this ratio avoids the problems of volatile earnings in the P/E ratio by averaging the inflation adjusted earnings of the last 10 years. It is calculated using the following method.

  1. Adjust each of the yearly earnings of the last 10 years for inflation.
  2. Averaging the result of the step 1.
  3. Divide the current price by the result of step 2.

Max   20 Yr   10 Yr    5 Yr
PE10 - CAPE - Historical Chart of the S&P 500 Shiller P/E Index Log Chart Source: Standard and Poor's and Robert Shiller