The S&P 500 is trading at a cyclically adjusted price-to-earnings ratio (“CAPE”) of 26.5 today. If history were any guide, that would suggest annualized returns over the next decade to be close to zero.
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Can the Federal Reserve alone continue to push the market higher?
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Yield on cost compares the current payout to the original purchase price. It takes no account of the current stock price.
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The Roth IRA — its cousin being the Roth 401(k) — can be thought of as the mirror image of the traditional IRA or 401(k) plan.
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One of the biggest drivers of stock returns — buybacks — is going to be on ice for the foreseeable future. This actually makes dividends all the more important.
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