Navigating long-term stock trends

Charting SP500 volatility, earnings, yields, and more

SP500 returns and percent drawdown since 1970

If you bought the SP500 index in 1970, you’d potentially have more than 70x your initial investment today. Adjusted for inflation, the stock market has been a remarkable store of value historically. Although it has withstood equally powerful drawdowns over time.

Charting earnings, yields, and dividends

SP500 average PE ratio, earnings yield, earnings, and dividends by month

The SP500 is a story of booms, busts, and a relentless source of potential compound interest. The major stock index tracks the hopes and dreams of millions of investing Americans — who largely outperform people who keep cash under metaphorical mattresses.

So what if we could see what’s really driving the market?

The PE Ratio for “Buffett-style” signal

The SP 500 Price-to-Earnings ratio has been on a rollercoaster since 1975, peaking during the dot-com bubble and crashing in 2008. Despite recent highs, the PE ratio today is lower than it was in 1999. Does that mean stocks are relatively undervalued today?

Earnings yield as a…