FYI: A large number of people have rightly been pointing to higher valuations to temper investor expectations about future returns. The problem is many of these same people have taken things a step further and used valuations to predict market crashes or the path of returns. Valuations don’t work very well as a timing indicator, as momentum and trend tend to trump valuation and fundamentals in the short-to-intermediate-term. This piece I wrote for Bloomberg gives some more context around this idea.
Regards,
Ted
http://awealthofcommonsense.com/2017/12/stock-market-valuations-wont-predict-the-next-crash/
