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 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

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 solve all … Continue reading Buy Low, Sell High: The Worst Financial Advice of All Time