Valuation Ratios and the Long-Run Stock Market Outlook | Zendy

John Y. Campbell | Zendy; Robert J. Shiller | Zendy

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Valuation Ratios and the Long-Run Stock Market Outlook

Author(s) -

John Y. Campbell,

Robert J. Shiller

Publication year - 1998

Publication title -

the journal of portfolio management

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.914

H-Index - 50

eISSN - 2168-8656

pISSN - 0095-4918

DOI - 10.3905/jpm.24.2.11

Subject(s) - valuation (finance) , stock market , financial economics , economics , stock (firearms) , business , monetary economics , finance , engineering , mechanical engineering , paleontology , horse , biology

The use of price--earnings ratios and dividend-price ratios asforecasting variables for the stock market is examined using aggregateannual US data 1871 to 2000 and aggregate quarterly data for twelvecountries since 1970. Various simple efficient-markets models of financialmarkets imply that these ratios should be useful in forecasting future dividendgrowth, future earnings growth, or future productivity growth. Weconclude that, overall, the ratios do poorly in forecasting any of...

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