Tag: consumer

Dow Jones Industrials

August 28, 2017 at 9:02 amCategory:General

They are now cheap enough shares to buy? Buenos Aires, Argentina on March 9, 2008 just look at bags of United States rates to realize that since a month ago are in full acceleration downward. The S & P 500 fell by 7% in the week that passed, 24% in the year and 56% from its all-time high in October 2008, the Dow Jones Industrials lost 6%, 24% and 53% respectively, and the Nasdaq Composite lost 6%, 18% and 55% respectively (its historic maximum was on March 10, 2000(, the top of the dot com bubble). The actions are beginning to see cheaper, says David Leonhardt of the New York Times. Is it so? We need to get us to buy after so many so-called failed in more than one inverter is returned to bury? Currently the price-earnings ratio (P/E, ratio precio-ganancia, i.e. the current stock price divided by annual dividends, which gives the years that retrieves the initial investment through the payment of dividends; a standard measure of valuation of an index or company) long-term (10 years of corporate profits ratio) of the index S & P 500 have fallen to 12. Being that the historical average is 16, the market in terms of profits of companies seems to be then depreciated by 33%. The author of the book irrational exuberance, Robert Shiller, points out that the times that the PE ratio has been between 12 and 13, the shares have doubled their value in the next decade, on average.

When the ratio has been between 15 and 20, the shares have risen by 50% in the next decade. And when the ratio has been above 25, the actions have not risen too. The S & P 500 PE is in 12 will be able to duplicate our capital by investing in shares of the index today? The market may continue to fall, reaching P/E even lower than the current ones.