I’ve posted Entry #388 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Value Proposition of Stocks Can Only Be Assessed Relative to What Is Being Offered By Other Asset Classes — Yes or No?
Juicy Excerpt: Is it possible that our failure to address the sky-high stock valuations that have applied for over 20 years now has put us in a spot where either the negatives associated with low interest rates or the negatives associated with high stock prices are locked in? I find the logic chain described by Shoehorn troubling. Yes, investors are being rational to choose even high-priced stocks in circumstances in which alternatives offering a decent return are not available. But why aren’t alternatives offering a decent return available? Can we identify the driver of the low interest rates?
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