In order to try to estimate how much money you need in retirement as well as determine how much money your investments will provide at that time — a
good inflation estimate much be used.
Using a
higher inflation estimate therefore increases average real earnings over the 10 - year period, and thus lowers the P / E10 ratio.
Given that
inflation estimates play an influential role in the calculation of the P / E10, it is important to investigate the assumptions behind the calculation of inflation.
Longer - term growth and
inflation estimates were left largely unchanged.
Most analysts expect this change to boost that month's
inflation estimate.
If the investor was rational, he or she would calculate their return of holding the conventional Canada at 2.75 % by subtracting
the inflation estimate of 4 % for a -1.25 % return over the period.
Jordan:
Inflation estimates are not very meaningful — it is a crapshoot.
Given that
the inflation estimate from the Philadelphia Federal Reserve is 2.3 percent over the next 10 years, the break - even rates are slightly below forecasted inflation.
CUB's analysis was based on historical electricity rates, past efficiency program performance, energy usage assumptions, key market costs, and
inflation estimates.