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Stock Market Valuations and Money Flows

Posted by nexvucapital on November 28, 2012

Current market valuations either require earnings to tailspin or equity prices need to rise. As can be seen by the attached slide from Mudd Finance, whenever the P/E Ratio for the S&P 500 has dropped below its average (18.83) since 1988 the market has gone up.

S&P Price/Earnings

 

And New Money continues to favour Bonds during 2012.

Net Mutuals 2012

 

Meanwhile the long-term bond yield continues in its 30 year bull market.

30 Year Treasury Yield

 

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