As long as you’re not talking nose-bleedingly stupidly high P/E ratios, a higher P/E ratio for the market is no reason to fear lower returns.
P/E
Contrary to what some of its adherents imply, PE10 will not see you dive effortlessly in and out of the market like a seagull stealing chips. But it’s a useful tool nonetheless.
Analysts, journalists and private investors often talk about the market being cheap or expensive on a P/E basis. What do they mean?