Because hubris—I has it.
In an article on the future relationship of Central Banks with economies and markets, The Wall Street Journal had this datum tossed in:
…shares in the S&P 500 are currently trading at 17 times the earnings they are expected to generate during the next year, compared with a 10-year average of 14.4[.]
That’s not a very large premium; all this P/E ratio means is that, in the coming year, stock market growth will be slower than in the last couple of years (recall that I’ve written, too, about the disconnect between the stock market and the underlying economy in the last few years). Prices will slow their rise as earnings catch up; prices won’t fall back toward earnings.
It takes a P/E above 20 for the markets to begin to approach drops in prices longer than day to day or week to week micro-corrections—otherwise recognized as noise.
Disclaimer for the legalists among you: I am not a registered or licensed advisor of any sort, nor do I play one on the radio.