In an earlier article, we discussed the primary factors that drive long-term stock market returns. Namely: Earnings yield Real GDP growth Inflation 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 … Continue reading Correlation between Stock-Market-Returns, GDP Growth and PE Ratios
Tag: Stock Market
What drives Stock Market Returns?
“The stock market is nothing more than a ponzi scheme”“It’s all just fake money”“Stocks prices are completely arbitrary. It can rise or crash any day” Chances are, you’ve heard some variation of the above, many times in your life. It’s hardly surprising - stocks play a crucial role in our economy and personal savings. And … Continue reading What drives Stock Market Returns?
Buy Low, Sell High: The Worst Financial Advice of All Time
As someone who’s given a number of talks on personal finance and managing your investments, there’s one piece of advice that I keep hearing from people over and over again. “Buy low, sell high”, they usually whisper to me in a sagely tone, as though they have discovered some profound truth that will unlock investment … Continue reading Buy Low, Sell High: The Worst Financial Advice of All Time