I’ve posted Entry #53 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s called This Is the Best Time in History to be a Stock Investor.
Juicy Excerpt: Please use Shiller’s data to choose any month from 1870 forward and look at the P/E10 level that applied to determine what stock allocation you should have been going with at that time. Then move ahead 10 years to see what return applied. Shiller’s data doesn’t identify the precise return. But, if the P/E10 level stayed the same or rose or fell only a bit, the return was solid or at least acceptable. If the P/E10 level fell hard, the return was poor or perhaps downright panic-inducing. Please complete this exercise for as many cases as you need to to convince yourself that you should always look at the P/E10 level of stocks before buying them.