Correlation between Stock-Market-Returns, GDP Growth and PE Ratios

In an earlier article, we discussed the primary factors that drive long-term stock market returns. Namely: Earnings yieldReal GDP growthInflation We also discussed ignoring fluctuations in the PE Ratio, because: PE ratios tend to be cyclic, and do not increase or decrease in perpetuity Over the long term, fluctuations in the PE ratio will cancel … Continue reading Correlation between Stock-Market-Returns, GDP Growth and PE Ratios