FTSE 250 Valuation review: Dec 2024
At 22,021, the FTSE 250 was essentially flat compared to today. CAPE ratios then were ~18x, closer to fair value. This suggested moderate returns, with dividend yields around 3.5%.
Valuation context
At 18x CAPE, expected real returns were ~5% annually. This was not cheap, but reasonable. Dividend yields provided income, and valuations offered a balanced entry point.
Quality investor implications
December 2024 offered a fair opportunity to accumulate mid‑caps with durable moats and growth potential. The margin of safety was better than today’s elevated levels, though still not generous.
Conclusion
The FTSE 250 at 22,021 represented fair value. Quality investors could find opportunities in resilient mid‑caps, though selectivity remained essential.