This audio lesson discusses stock market valuations and why they are helpful for understanding base market conditions but not necessarily for timing the market.
Items covered include:
- Why valuation works as a good estimate of long-term investment returns and why I use them in the monthly investment conditions report.
- What are cyclically adjusted price-to-earnings ratios.
- How have stock market returns varied based on the level of cyclically adjusted P/E ratios.
- How market momentum can influence market returns irrespective of stock market valuations.
- How long has it taken the U.S. stock market to peak after hitting cyclically adjusted P/E ratio greater than 25
The episode length is 13 minutes.
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