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How Much Do S&P500 P/E Ratios Vary Historically?

Posted By Barry Ritholtz On June 4, 2014 @ 1:00 pm In Index/ETFs,Investing,Markets,Valuation | 5 Comments

[1]
Source: Bespoke Investment Group [2]

 

How expensive are stocks?

Its a question that seems to beget many different answers. Too often, the response reflects the responder’s investment posture. If they are long equities, they typically respond by saying “Not very.” If they are short, or in cash or in other risk assets, the answer is the opposite.

For today’s chart, I wanted to look at this question differently, by considering different P/E ratios relative to history. What does looking at P/E ratios over 10, 25 or 85 years do to what is the historical average ? continues here [3]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2014/06/how-much-do-sp500-pe-ratios-vary-historically/

URLs in this post:

[1] Image: http://www.bespokeinvest.com/storage/SP%20500%20PE%20Ratio%20vs%20Long%20Term%20Average.png?__SQUARESPACE_CACHEVERSION=1400601388477

[2] Bespoke Investment Group: http://www.bespokeinvest.com/thinkbig/2014/5/20/sp-500-historical-pe-ratio.html

[3] continues here: http://www.bloombergview.com/articles/2014-06-04/a-closer-look-at-historical-averages-ritholtz-chart

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