The Julia La Roche Show · Wednesday, September 16, 2026
Jeffrey Gundlach, founder and CEO of DoubleLine Capital, stated that the S&P 500's Shiller CAPE ratio is at an elevated level, suggesting that forward 10-year real returns could be negative. He noted that historically, when the CAPE ratio has been 35 or higher, subsequent 10-year real returns have been negative, averaging around -5% per annum.
“Well, the valuations of the markets are pretty high. In fact, the Shiller CAPE ratio for the S&P 500 is at 42 point something. And anytime that it has been 35 or higher, every single time, the forward 10-year return in real terms, so versus inflation adjusted, has been negative.”
“And the most common one has been about negative 5% real per annum. So, if inflation is going to be 2%, if Kevin Warsh is going to guide us to 2% and stay there, that would mean that you should expect negative returns on an annual basis for the next 10 years. And there are no exceptions to it.”