Sentences with phrase «estimating subsequent market returns»

Not exact matches

This adjustment has historically been important, as adjusting for that embedded profit margin significantly improves the relationship between the CAPE and actual subsequent market returns (something we can demonstrate both with algebraic return estimates and regression models — see Margins, Multiples, and the Iron Law of Valuation).

The strong one - to - one relationship between these estimates and actual subsequent market returns is presented in numerous prior weekly comments (see for example Too Little to Lock In).

Our perspective is straightforward: on the basis of measures that have been reliably correlated with actual subsequent market returns in market cycles across a century of data, we estimate that the S&P 500 Index will be no higher a decade from now than it is today.

That's fairly close to our own estimate of about 2.4 % based on a broad range of alternative measures that are highly correlated with actual subsequent market returns.

On the basis of valuation measures most tightly related to actual subsequent long - term market returns, we also estimate that the S&P 500 is likely to be lower 12 years from now, compared with current levels, though dividend income may push the total return just over zero on that horizon.