Tag Archives: regression to trend

The S&P 500 is considerably overvalued - somewhere in the range of 34% to 61% - depending on which of 4 market valuation indicators are used and whether the valuation is based on the arithmetric or geometric mean of each. While these findings are not useful as short-term signals of market direction...they play a role in framing longer-term expectations of investment returns and suggest a cautious outlook and guarded expectations. [Here are the details.] Words: 676

About the only certainty in the stock market is that, over the long haul, over-performance turns into under-performance [ i.e. reverts to the mean or average trend line] and vice versa [and depending on what data you use the stock market could be setting up for a MAJOR fall. How major? Read on!] Words: 840

Was the March 2009 low the end of a secular bear market and the beginning of a secular bull? Without a crystal ball, we simply don't know. One thing we can do is examine the past to broaden our understanding of the range of possibilities [so let's do just that by looking at charts of the inflation-adjusted secular highs and lows and regressions to trend of the S&P 500 from 1871 to the present so we can make some sense of it all]. Words: 682