The best buying opportunity in 12 years?

A report on the website of Fool says the P/E - the price of stocks divided by their last 12 months of earnings - in the S&P 500 are cheaper as a group today than they have been for 12 years.

Year   Q2-Ending S&P 500 P/E
Today    16.62
June 30, 2007  17.34
June 30, 2006 17.05
June 30, 2005 18.80
June 30, 2004 20.32
June 30, 2003 28.21
June 30, 2002 37.02
June 30, 2001 33.28
June 30, 2000 28.02
June 30, 1999 33.46
June 30, 1998 29.10
June 30, 1997 21.83
June 30, 1996 19.21
June 30, 1995 15.82

"Mid-2003, when the large caps in the S&P 500 had a trailing P/E of 28, was actually a pretty good time to be making investments because the earnings in the denominator were so depressed that the ratio was misleading without taking normalised earnings levels into account.

"So, today's low prices for a dollar of the past year's earnings could be an indicator that it is an especially good time to invest new funds in the market,"the report said.

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Philip Durell, advisor/analyst of Inside Value, says there are so many great values around today that it is tough to select just a few. "For risk-averse investors, look long and hard at blue-chip market leaders such as Wal-Mart, American Express or Johnson & Johnson.

"These three stalwarts have less than 4% earnings growth built into their share prices in my estimation, yet all are capable of growing at least in the high single digits. All of them also pay a reasonable dividend and are buying back shares while the price is low. Best of all, you can buy these rock-solid companies for roughly 75 cents on the dollar."

Click here to read the full report