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What do you mean by "index yield"? Average p/e ratio is 35 from what I am googling so that's 3% right there. As there is not much incentives to make profit (bet

What do you mean by "index yield"? Average p/e ratio is 35 from what I am googling so that's 3% right there. As there is not much incentives to make profit (better to invest, buy other companies etc.) It should be higher than 3%. If you mean dividend yield then it's a completely meaningless metric for obvious reasons. The only thing dividends matter for is assessing growth potential and how well the company is run (inverse correlation with both). I think it's completely crazy to expect returns of 7-8% as they historically were. My view is that equities were criminally undervalued for decades, they are still undervalued but at least more reasonably priced now. It will take a while. I think it will a better world if you can't just get 7% or 5% or w/e almost risk free return. Once the returns are closer to 0 there will be incentive to deploy capital to create value which will be better for most, especially for the working class.

nemo44x 5y ago
> What do you mean by "index yield"? If you were to hold an S&P500 ETF, the dividend yield you'd receive each year. Yes, the P/E is 35 today but historically it has been 15. It tends to find a correction back to 15 eventually. However, this is the average since the late 1800's and of course things are different today. I think if you look at the last 40 years, P/E has been a bit higher than 15 on average. > I think it's completely crazy to expect returns of 7-8% as they historically were. My view is that equities were criminally undervalued for decades, they are still undervalued but at least more reasonably priced now. It will take a while. I think it will a better world if you can't just get 7% or 5% or w/e almost risk free return. Once the returns are closer to 0 there will be incentive to deploy capital to create value which will be better for most, especially for the working class. That's an interesting way to look at it and I can't say I disagree. It is interesting how the purpose of equities has changed. For many years it was the idea that you wanted to create an income source. But over the last 100 years it has changed to expecting appreciation. I think my main disagreement is I think a world with higher interest rates and therefore lower asset prices is a more stable place. But I see your point of view. But with no returns, why would anyone invest in a company? Why would anyone loan money or buy equity if there were no expectations of a return and yet the risk of bankruptcy still existed? Why would a stock appreciate in value if it would return nothing? I mean, the only reason a stock raises in value is because it is assumed that their profits will eventually be paid out at a percentage of the calculated risk.

nemo44x 5y ago

> What do you mean by "index yield"? If you were to hold an S&P500 ETF, the dividend yield you'd receive each year. Yes, the P/E is 35 today but historically it has been 15. It tends to find a correction back to 15 eventually. However, this is the average since the late 1800's and of course things are different today. I think if you look at the last 40 years, P/E has been a bit higher than 15 on average. > I think it's completely crazy to expect returns of 7-8% as they historically were. My view is that equities were criminally undervalued for decades, they are still undervalued but at least more reasonably priced now. It will take a while. I think it will a better world if you can't just get 7% or 5% or w/e almost risk free return. Once the returns are closer to 0 there will be incentive to deploy capital to create value which will be better for most, especially for the working class. That's an interesting way to look at it and I can't say I disagree. It is interesting how the purpose of equities has changed. For many years it was the idea that you wanted to create an income source. But over the last 100 years it has changed to expecting appreciation. I think my main disagreement is I think a world with higher interest rates and therefore lower asset prices is a more stable place. But I see your point of view. But with no returns, why would anyone invest in a company? Why would anyone loan money or buy equity if there were no expectations of a return and yet the risk of bankruptcy still existed? Why would a stock appreciate in value if it would return nothing? I mean, the only reason a stock raises in value is because it is assumed that their profits will eventually be paid out at a percentage of the calculated risk.