I’ve posted Entry #203 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Would P/E12 oe P/E8 Work As Well as P/E10?
Juicy Excerpt: The other side of the story, however, is that a less productive economy will hurt Buy-and-Holders as well. And Buy-and-Holders too will be underinvested in stocks in the event that we see levels of productivity that few anticipate. The reality that the U.S. economy may be more or less productive in the future than it has ever been in the past is not an argument for staying at the same stock allocation at all times so much as it is an argument for being flexible in one’s expectations of future returns.