Our country’s current financial situation is scary for potential investors at this time due to the current Price/Earning multiples. This article describes the stock market environment right now as having a high price while having low earnings. There are also many economic forecasters calling for low GDP growth in the U.S. However this scare for investors may be mirage. Read on to learn more.
Key Takeaways:
- One of the more popular measures of stock market value, the forward price/earnings (P/E) multiple, is so high that one closely-followed economist warned that buying stocks now would be like “picking up nickels in front of a steam roller.”
- Indeed, while stock prices (P) have surged, analysts’ published forecasts for earnings (E) have gone sideways.
- One narrative that’s been flying under the radar is how Donald Trump’s election is impacting the analysts’ forecasts for earnings.
“Nowcasts of economic activity suggest growth remains strong into the New Year. Thus, we see more room for upward revisions to the consensus.””
http://finance.yahoo.com/news/high-forward-pe-multiple-a-mirage-143525875.html
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