by Jason Bodner
October 14, 2025
I was on a flight last week. All was going fine, and I was scheduled to arrive in West Palm Beach at 5:00 pm. I heard murmurs of bad weather, and we started circling. Then the pilot said we were out of fuel and had to divert to Tampa. En route we hit that bad weather. The plane rocked and rolled. I gripped the seat handles. No one said anything, but everyone was likely thinking the same thing… nervousness set in.
Deep down, you start thinking the worst, but I’ve been there before. Naturally, everything turned out fine, or I wouldn’t be writing this column. I had a drink in the airport bar while we refueled, then headed home.
The stock market investor’s journey is a lot like flying through turbulence, perhaps on low fuel (liquidity) at times – times like last Friday’s big and sudden decline – but consider these facts: Commercial aviation is incredibly safe. Between 2018 and 2022, the risk of a fatality in a commercial passenger flight globally was approximately one in 13.7-million, or 0.0000073%. The odds of a fatal crash are vanishingly small.
The market is also safe, in the long run, for long-term investors. As I warned last week, October is often a month with volatile air pockets. This past week saw some volatility in the S&P 500, but like turbulence in flight, this was (so far) only a momentary bump. History tells us to expect a mostly smooth flight with some periodic jolts along the road to our destination, which is higher stock prices by year’s end.
Stocks recently hit new all-time highs. Gold is at all-time highs. Crypto is rising, too. And to cap it off, there is still a record pile of cash sitting in money markets. We just got our first rate cut of 2025, in what will likely become a new easing cycle – a series of rate cuts; add this to lower taxes, and higher earnings – lately shattering expectations. According to FactSet, 81% of companies beat both revenue and earnings in Q2, and the next (third-quarter earnings’ reporting season is about to begin, later this week. The world is also getting closer to removing a major geopolitical headwind. Israel and Hamas agreed in principle on a deal to end the war. President Trump didn’t win a Nobel Peace Prize, but he helped broker the deal.
All this means the flying weather is usually spectacular, but investors are starting to get nervous. One reason: the S&P 500 P/E ratio is trading at nearly 30, per MacroTrends. That seems like a scary level, when you consult this P/E chart since 2022, below – rising from 20 in 2022 to nearly 30 now.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
However, when you compare the current P/E ratio against the 30-year chart, the rise is less alarming:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
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