4 ms·
then again: beware of averages. Historical PE ratios are quite high (though EV/FCC would be more instructive) - so it is unlikely that the next couple of years
by mxschumacher 10y ago
then again: beware of averages. Historical PE ratios are quite high (though EV/FCC would be more instructive) - so it is unlikely that the next couple of years will bring 7%. We're living in a world of free money: if central banks change interest rates the party could come to an end.
- xapata 10y agoNot necessarily. If the interest rates are reduced because the economy improved, then the growth could stay similar.
- stana 10y agoAren't interest rates reduced to stimulate a struggling economy, and increased if economy improving?
- xapata 10y agoRight. If interest rates are increased, that's a sign of a stronger economy and the market might go up in response. On the other hand, traders might decide the Fed is mistaken, the economy is not in fact stronger, and they'll react to the higher interest rates by taking fewer loans and the market will go down. Basically, the change is already priced-in and you shouldn't worry about timing the market. Buy and hold.
- gragas 10y agoInterest rates go up when the economy is improving.
- xapata 10y agoOops. That's what I meant to say: s/reduce/increase/