It looks like you're new here. If you want to get involved, click one of these buttons!
how-to-use-the-cape-ratio-to-double-the-return-of-the-s-and-p-500If the CAPE Ratio can be used to show us where individual pockets of deep value plays exist, then we can purchase shares that are already depressed before a market correction occurs. If one does this, then the stocks stand little chance of going much lower. I do believe that the CAPE Ratio is best used in this manner.
etf.com/sections/index-investor-corner/21663.html?nopaging=1The research shows that valuation metrics such as the CAPE 10 explain about 40 percent of real (after inflation) 10-year returns. However, it’s also important to note that the CAPE 10 provides no value forecasting short-term returns. In fact, the correlation with one-year-ahead returns is close to zero.
https://dqydj.com/shiller-pe-cape-ratio-calculator/I offer an alternative explanation of the elevated CAPE ratio. The nature of the earnings series that is substituted into the CAPE model has not been consistently calculated for the long period over which Shiller has estimated his
CAPE equations. Changes in accounting practices since 1990 have depressed reported earnings during economic downturns to a much greater degree than in the earlier years of Shiller’s sample. Because the CAPE ratio takes into account the last 10 years of earnings, any stock return forecast issued before 2018 will include the extraordinarily low earnings of 2008–2009 and may be biased downward.
© 2015 Mutual Fund Observer. All rights reserved.
© 2015 Mutual Fund Observer. All rights reserved. Powered by Vanilla