There is no perfect valuation model. Investors typically use a whole menu of valuation models to hopefully offset the limitations of any single model. Equities certainly are cheaper than they were a month ago, but the big question for investors is whether they are cheap enough. By one measure they certainly are cheap and that is relative to interest rates. The question for investors is whether we have entered a prolonged period of muted valuations invalidating everyone’s current valuation models. In today’s screencast a look at market valuations.
Items mentioned in the above screencast:
Checking in on the market valuation picture. (Abnormal Returns)
Keep an eye on the 2% dividend yield for the S&P 500. (Crossing Wall Street)
S&P 400/500/600 P/E ratios. (Dr. Ed’s Blog)
No matter how you slice it market valuations are still low in an absolute sense. (Hussman Funds)
What if we are entering an extended period of low valuations? (Modeled Behavior)