While the blue valuation line showed relatively rich valuations, actual market returns over the next 6 years were even worse than expected. (hussmanfunds.com)
Note the overshoot of actual market returns (versus expected) in the decade since 2002. (greenbackd.com)
As I detailed in Survival Tactics for a Hypervalued Market, the «errors» between actual market returns and those that one would have expected (on the basis of reliable valuation measures 12 - years earlier) are tightly correlated with by cyclical fluctuations in consumer confidence (h / t Mark Louis for that insight). (hussmanfunds.com)