Greg Weston

Will You Look Back on Today as Your Greatest Missed Opportunity?

Those "average" PE ratios you list were years in which the massive baby boom generation (not just US but Western Europe, Canada and Japan) were at their peak earnings and buying stocks for their retirement. This generation is already starting to sell assets as it goes into retirement. Those born in 1946 are now 62 so many are still buying, but the number of buyers goes down and sellers goes up each and every year.

Current P/E ratios are also inflated because of an extremely pro-corporate president (2001-2008) and Congress (1995-2006).

That soon will change, and the historically high corporate profits of the 2000's will be a distant memory. For example, stronger unions will lead to more wage pressure.