For the full data set, about 28 percent of months have had lower
valuations than current levels based on the price to smoothed earnings ratio.
Not exact matches
These behavioral finance influences can skew a portfolio's overall allocations toward an overemphasis of potentially higher - yielding equities that in some instances may represent more downside risk
than upside potential at
current valuation levels.
The economic gains and market returns that emerged during the Reagan Administration began from a starting point of 10.8 % unemployment, a
current account surplus, and market
valuations that - on the most historically reliable measures - were less
than one - quarter of present
levels.
Our actual expectation is that the completion of the
current market cycle is likely to wipe out the entire total return of the S&P 500 — in excess of Treasury bill returns — all the way back to roughly October 1997; an outcome that would require a market retreat no larger
than it experienced in the past two cycles, and that would not even carry historically reliable
valuation measures to materially undervalued
levels (see When You Look Back On This Moment In History).
Our actual expectation is that the completion of the
current market cycle is likely to wipe out the entire total return of the S&P 500 — in excess of Treasury bill returns — all the way back to roughly October 1997; an outcome that would require a market retreat no larger
than it experienced in the past two cycles, and that would not even carry historically reliable
valuation measures to materially undervalued
levels (see When You Look Back On This Moment In History).
At
current levels of the market, the yield of these bonds more
than compensates for the possibility of capital growth in equities (
valuations are stretched)
However, over the next 10 to 15 years, markets are very likely to revert to average
valuations, which are much lower
than current levels.
Even then, the
current valuation levels are higher
than some other time periods with similarly low interest rates.
I'll admit they do appear to have upped their game & growth potential more recently... but obviously you're more
than paying for that in the
current share price &
valuation (vs. the sub-40 cent
levels I enjoyed)!