Is The S&P500 Overvalued? What Can You Expect . . .

This article provides a range of values depending on the scenario chosen. The author believes that a fair value for the S&P 500 Index is within the range of 873 (for required expected return of 9%) to 1031 (for required expected return of 7%), with a mid-point estimate of 944 (for required expected return of 8%). Our assumption is that the S&P earnings will grow with GDP at about 4.5% per year and yield a 2.1% dividend yield and sell at a long-term P/E of 15 in ten years.


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