Relative Valuation Index Report
This histogram shown below is similar to the Weekly Market Risk Report in style, yet the Relative Valuation Index looks at the market from a slightly different, new perspective.
Allow the words of Chief Investment Officer Tom Veale to explain.
He says, “The SignalPoint Relative Valuation Index gives a more complete look at stock market valuations than does average Price/Earnings ratio. It is important to know that stock market earnings need to be compared to what cash can earn in a relatively risk free environment. If risk free returns are high they compete quite successfully with stock market earnings (which are considered of greater risk).
Our Relative Valuation Index combines broad stock market Price/Earnings with short term interest rates to achieve a better understanding of the current value of stocks in the real world. As earnings and interest rates change the Relative Valuation Index consolidates the information as an effective stock market risk guide.”