Firstly, as obvious as it seems, the S&P 500s level in absolute terms is irrelevant.

What
is important is the price of the index weighted against the performance of its
constituents underlying businesses. The S&P sits at a trailing price to earnings ratio of
about 21 times, or an earnings yield of 4.7 per cent. Based on the last 50 years, this is not
eye-poppingly expensive. Those that boldly declare it a bubble should cast an eye at
the multiple US shares hit during the late-90s tech bubble.