Valuations and long-term equity performance

The high valuation of the US stock market is a strong reason to think that returns from it over the next decade will be substantially lower than they have been over the last one. But focusing on the valuation of the entire market does not tell the whole story. Within the market, the gap between the price/earnings (P/E) ratios of the highest- and lowest-valued firms has also become exceptionally wide.
Oliver Jones Senior Markets Economist
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