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P/E 24 = Dead Money: Why J.P. Morgan's 35-Year Chart Shows the Great Rotation From the S&P 500 to the Metals and Miners is the Play in 2026!
Published by J.P. Morgan Asset Management, the above chart is a 35-year roadmap that shows, with mathematical certainty, that the S&P 500 is about to deliver a decade of zero to negative returns, just like it did in the late 1960s into the 1970s.
At a forward P/E ratio of 24, the index is in the top decile of historical valuations, a zone from which there has never been a positive outcome. For three years, portfolio managers have successfully chased the A.I. and tech narrative, ignoring value and lately the fundamentals. But is the party coming to an end?
The data is in. And in 2026, the great rotation will begin. The smart money, the yield-hungry institutional capital, is about to abandon the overvalued, overhyped S&P and flood into the one asset class that is not only undervalued but is also the best-performing asset of 2025: precious metals and their miners.
This is not a prediction; it is an inevitability. Like a moth to a flame, these portfolio managers who are hungry for higher yields will enter the fray. And it will be the defining trade of 2026 and likely much longer.
For the past three years, the narrative has been simple: buy tech, buy A.I, buy the S&P 500. It has been a winning trade. The returns have been spectacular. The NASDAQ has soared. The Magnificent Seven tech stocks have minted fortunes.
But as we stand on the precipice of 2026, the game is about to change. The easy money has been made. The valuations have been stretched to their breaking point. And the very institution that has been at the heart of the financial system, J.P. Morgan, has handed us the map to the future. It is a map that shows a dead end for the S&P 500 and a superhighway for hard assets.
The chart is not an opinion or a forecast. It is a historical record of what has happened, without exception, over 35 years of data. And it is telling us, in the clearest possible terms, that buying the S&P 500 at today’s valuations is a losing proposition. Not a risky proposition. Not a questionable proposition. A losing proposition.
- You need to understand the undeniable, 35-year correlation between starting valuations and future returns.
- You need to understand why, at a P/E of 24, the S&P 500 is mathematically destined for a lost decade.
- And you need to understand the case for the great rotation of 2026; the massive, inevitable shift of institutional capital from the overvalued paper assets of yesterday to the undervalued hard assets of tomorrow.
This is not about a market crash. It is about a quiet, seismic shift in leadership. It is about the smart money finally waking up to the reality that the only game left to play is the one based on real value, real assets, and real returns.
The great rotation is coming. And for those who understand this chart, it will be the opportunity of a lifetime.
Let’s Dig Into The Following:- Why the correlation is undeniable and absolute: the higher the starting valuation, the lower the future returns. Paying too much upfront usually shows up later. There are no outliers. There are no exceptions. And why it is as close to an iron law of finance as you will ever see.
- Imagine you are a portfolio manager at a major institution. For the past three years, you have been rewarded for being long the S&P 500, for chasing the A.I. narrative, and for ignoring valuations. And now you are faced with a terrifying realization: the game has changed. So, what do you do? You start to look for alternatives!
- Why this rotation will not happen in a vacuum. It will be driven by a powerful confluence of catalysts, including: hunt for yield, inflation and geopolitical hedging, & the 401K and pension tsunami, among others. And why the undervalued, cash-flowing assets will be the destination and that will force their prices to go vertical!
- Why the portfolio managers who missed or faded this in 2025 will not make the same mistake in 2026. They cannot afford to. Their careers, reputations, and bonuses depend on it!
- With oil prices remaining low, the cost structure for mining operations is extremely favorable. This combination of sky-high metal prices and low energy costs is creating a profit bonanza that has not yet been fully reflected in their stock prices. Why when the market finally accepts that these higher metal prices are not going away, the re-rating of the miners will be violent!
- Why as the S&P 500 flatlines and the metals and miners continue their relentless climb, the pressure to join the rotation will become unbearable. The fear of missing out on the new bull market will eventually overwhelm the fear of abandoning the old one. And that is when the trickle will become a flood!
- And why as the reality of the bond market’s failure sets in, the trillions of dollars that have been allocated to bonds will need a new home. And that home will be gold, silver, and the miners. This is not a small shift. This is a generational reallocation of capital and it is just beginning!
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