The Only New Stock I've Bought This Year Is the Perfect Addition Amid a Historically Pricey Stock Market

Earlier this month, the Dow Jones Industrial Average, S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite deed caller all-time highs -- and banal valuations astir followed suit. The second-priciest banal marketplace successful past has made it challenging to find a fundamentally charismatic deal.

While I've selectively purchased shares of a fewer existing holdings this year, there's lone 1 caller banal I've added to my portfolio, and it's ideally positioned to win amid a historically pricey banal market: York Water (NASDAQ: YORW).

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Historical headwinds are mounting for Wall Street

Although "value" is subjective and varies from 1 capitalist to the next, the S&P 500's Shiller Price-to-Earnings (P/E) Ratio cuts done this subjectivity. The Shiller P/E, besides known arsenic the Cyclically Adjusted P/E Ratio (CAPE Ratio), is based connected mean inflation-adjusted net implicit the trailing decade.

When back-tested to January 1871, the S&P 500's Shiller P/E Ratio has averaged astir 17.4. In aboriginal June, the CAPE Ratio for the existent bull marketplace peaked astatine 42.84, which is simply a stone's propulsion distant from the all-time precocious of 44.19 that was established successful December 1999, conscionable months earlier the dot-com bubble burst.

History shows that Shiller P/E Ratios supra 30 aren't sustainable implicit extended periods. While this valuation instrumentality can't pinpoint erstwhile the euphony volition halt for Wall Street, it does person an uncanny way grounds of foreshadowing important downside. The erstwhile 5 instances successful which the CAPE Ratio exceeded 30 were each yet followed by 20% oregon greater declines successful the Dow, S&P 500, and/or Nasdaq Composite.

In different words, past points to a big-time correction oregon carnivore marketplace successful the presumed not-too-distant future.

"Wall Street's Greatest Dividend Stock" makes for an perfect concern

Despite truthful fewer deals to beryllium had successful 2026, h2o and wastewater inferior York Water caught my attention.

The quality of h2o utilities is their predictability. Demand for h2o and wastewater services doesn't alteration overmuch from twelvemonth to year. Furthermore, astir utilities run arsenic monopolies oregon duopolies successful the areas they serve, meaning there's nary interest astir York losing its currency travel to competitors.

York Water operates arsenic a reasonably tiny regulated inferior successful South-Central Pennsylvania. On the 1 hand, being regulated means it needs support from the Pennsylvania Public Utility Commission (PPUC) to rise its customers' rates. Conversely, it protects York from unpredictable wholesale pricing, adding to the predictability of its currency flow.