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Discussion Starter #1 (Edited)
Hello,

I realize it's an old book, but I was curious what your thoughts are on some of the ideas that Robert Shiller outlined in his book Irrational Exuberance?

If you look at the data in his website, the latest cyclically adjusted P/E ratio of the S&P500 is now at 20 - still historically high, and according to him this means there is a high probability that returns on equity investment (as a whole) will be very low for the next decade or so. I've read about Warren Buffet making similar pronouncements as well.

In my case, my investment horizon is 15-20 years.

A chart with the historical S&P P/E info can be found in his website below:

http://www.irrationalexuberance.com/index.htm
 

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I'm 67 and I consider my time horizon to be much less than 20 years!

20 years IF I am lucky and beat the odds!!:confused:
 

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I wouldn't necessarily say stocks are very expensive right now, especially considering the low interest rate environment we are likely to be in for the next several years.

I think Shiller would say that stock returns aren't likely to be very high but they may be slightly subpar compared to long-term trends.

I know Bogle has talked about getting 7-8%/year compared to last century when returns averaged 11%/year. Bernstein has predicted about 6%/year based on the Gordon equation.
 
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