Image Source: Chart of the Day
If you’re an avid follower of the financial markets, no doubt you’ve heard a money manager make the claim that “this market is cheap” as a reason to get you, or keep you, invested in the stock market after it’s doubled from March 2009 to present.
Truth is, that claim is just not true.
True, the price to earnings ratio of the S&P 500 hasn’t been this low since 1991. What is not true, is that P/E ratio in the upper teens is — historically — anything but cheap.