Not exact matches
Of course, in recent years, stock prices have grown much
faster than earnings and dividends, driving the P / E far above its
historical average and the dividend yield (D / P) far below its
historical average.
This leaves roughly 1.4 % of
historical long - term returns which can be attributed to past expansion in the Price / Earnings multiple (i.e. over the past 50 years, prices have grown somewhat
faster than the 5.7 %
average rate of earnings growth).
These poor early returns may cause the portfolio to be depleted much
faster than expected based on
historical averages.
This leaves roughly 1.4 % of
historical long - term returns which can be attributed to past expansion in the Price / Earnings multiple (i.e. over the past 50 years, prices have grown somewhat
faster than the 5.7 %
average rate of earnings growth).