Check the Shiller CAPE (Cyclically Adjusted Price-to-Earnings) ratio (Google it!) and current inflation. This CAPE ratio is like a “long-term thermometer” for stock market temperatures, comparing stock prices to company earnings over 10 years (instead of just 1 year) to smooth out short-term volatility. Higher CAPE (e.g., ~30+ today) = stocks are overpriced and you take slightly lower withdrawals (e.g., 5%), lower CAPE (e.g., ~15 in crashes) = stocks are on sale higher withdrawals are possible (e.g., 5.5%). Don’t obsess because this matters most at retirement. Bill’s book has tables to guide this.
Tip: Google “Shiller CAPE” and if the number is way above 17, you may want to tone withdrawals down a bit.
👉 Bonus: Week 10’s session will give you a simple formula to combine these checks without overthinking and the Forecasting workshop (Aug 18) will look at dynamic planning.