Volatility remains high with much hanging on Trump's announcements. Threatening to wipe out a country and its civilisation does not go down well, and then, in the next few days, announcing a two-week ceasefire really does add to the unpredictability of markets.
We remain cautious and somewhat sceptical the ceasefire will hold. The two-week pause is exactly that: a pause. Markets rallied hard on the news, with the Dow surging over 1,300 points on Wednesday and oil dropping 16% in a single session. But a two-week reprieve is not a resolution, and the Strait of Hormuz is still barely functional for shipping.
This Week's Whiplash
This is the problem with trading headlines. One day you are up 2.5%, the next you give half of it back. Unpredictability is not the same as opportunity. For most investors, the best move right now is not to react, but to understand what the underlying numbers are actually telling you.
The VIX, Wall Street's "fear gauge," tells you how much volatility the market expects over the next 30 days. This week it whipsawed from above 25 (pre-ceasefire) to around 17 (post-announcement) and back above 21 within 48 hours. That kind of movement tells you one thing: nobody knows what comes next.
CBOE Volatility Index (VIX) — Current: ~21
VIX data sourced from CBOE. Updated as of April 10, 2026.
Each week we check in on the S&P 500 Shiller CAPE ratio, one of the most reliable long-term valuation measures available. It smooths out short-term earnings noise by using a 10-year inflation-adjusted average. When the CAPE is high, future returns tend to be lower. When it is low, future returns tend to be higher.
At ~36.5, the CAPE has pulled back slightly from last week's ~38, but remains more than double its historical median of ~17. The market came down a touch with war-related selling in March, but the underlying message has not changed: valuations are stretched, and when you pay expensive prices, your future returns are lower.
CAPE data sourced from Robert Shiller, Yale University. Updated weekly.
It is not just the CAPE. The chart below shows four separate valuation methods, all adjusted to their long-term geometric means (the "normal" line sits at 0%). Every single one is screaming the same thing: markets are well above fair value. The average across all four sits at around 162% above their long-run means.
Market Valuation Methods vs Geometric Means — March 2026
Source: Advisor Perspectives / VettaFi, March 2026. 0% = fair value at geometric mean.
When the 0% line represents "normal," and every measure is above 100%, you are looking at territory that has only been reached a handful of times in 125 years. Most of those times did not end quietly.
This is why we keep coming back to the same message: most macro indicators are pointing to overvaluation, but many investors are still content to play with fire. The question is not whether valuations are high. They are. The question is whether you are positioned for what happens when the music stops.
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