![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMEd0b6vwEBxpHrDc2R6G4D5OaHNr8Y2FahjpeNp56p88JOCn9raywfGzjBUGTuxY8lc7y-hvJwou453uHriS3YS8H3snnhtvhYL7k92md-eDTaFIBj_p69apZIaTFlFCSA_3hzo9lNMU/s400/CampbellShillerReduxG10.PNG)
This picture,
courtesy of Johns Hopkins econ prof Chris Carroll, shows the correlation of the stock market's price-earnings ratio (where earnings are a 10-year average) and the subsequent real return on equities. The point labelled 1996 is the era dubbed "irrational exuberance."
The bottom line: Right now, the expected inflation-adjusted return is about 6 percent.
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