Have a look at the average P/E ratio of the entire S&P 500 index...

Have a look at the average P/E ratio of the entire S&P 500 index over these three periods of market mayhem:

Period
Average S&P 500 P/E Ratio

1977-1982
8.27 times

1947-1951
7.78 times

1940-1942
9.01 times

Compare that to the average P/E ratio today of around 20 times and a seven-year average of more than 24 times, and it's pretty apparent that stocks could fall much, much further than they already have.

Just by returning to the lows they historically hover around during downturns.

Assuming earnings stay flat, revisiting those historically low levels could easily mean a nearly 50% decline from here.

For the Dow Jones Industrial Average, that'd correlate to roughly Dow 5,000 -- give or take.

Of course, I'm not predicting, warning, or forecasting -- I'm just taking a long look at history.