the higher the schiller PE ratio, the lower average returns for the next decade.
No doubt.
But the thing is: you have to have somewhere to stick the money. Whether that's gold, cash, commodities, bonds, stocks, real estate, whatever...
The market may have lower than average returns going forward in the short term,
but it still may be better than everything else. And without a crystal ball, we just don't know.
Given that everything ELSE looks overvalued, too. The bond market is at historically ridiculously low rates, so has not much elsewhere to go but up. Real estate has been driven up over the last 4-5 years.
Quantitative easing has put the world awash in funds searching for yield, driving all assets up, and lowering the forward looking expected returns on everything.
Thus you see so many companies hoarding cash (see Berkshire, or Apple, for examples). And you see TONS of companies doing stock buybacks.
If I had extra cash and found an alternative investment vehicle more likely to produce better returns over the next decade
There's the rub. The market IS overvalued. Yet it still seems like the best place to put your investments, IMO.
Because it's hard to find anything that isn't overvalued, without chasing yield and ending up way riskier than you should, giving you quite poor risk adjusted returns (with things like peer to peer lending, or crowd sourced real estate investment sites).
So I vote: stay the course.
YMMV, of course. :)