With first quarter earnings season practically over, we wanted to provide an update of the market’s overall valuation and see where it stands from a historical perspective. Although the S&P 500 is up this year, the trailing P/E ratio for the index has actually declined slightly from where it stood at the end of 2011 (13.28 vs. 13.29). This continues a trend of P/E contraction we saw in 2011 where earnings grew at a double digit rate, yet stocks were flat.
Earlier today, we sent out a report to Bespoke Premium clients providing a valuation checkup using a variety of indicators. Clients that wish to view this report can click on the link below. If you are not yet a client and wish to join, sign up today!