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The next question now becomes, is the S&P 500 overvalued? If we use a 10% growth rate on 28-29 times trailing earnings then the foreword yield is still lower than the current 10 year treasury rate. This is a clear sign that the S&P is overvalued. You are much better off buying the 10 year notes for capital appreciation than an S&P etf index. In a recession, you will almost never lose buying the 10 year note and will certainly outperform the S&P over a short duration.
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