The simple math of stock returns
We have noted in many articles of the past that asset prices come from fundamentals (e.g. earnings/dividends) x investor emotion. Below is a reprint of an article from Ben Carlson’s “A Wealth of Common Sense” blog discussing the same notion but from a much higher power than ourselves – namely Vanguard founder John Bogle!
Take it away Mr. Carlson and Mr. Bogle:
Vanguard’s John Bogle has a simple formula for estimating future stock market returns: (more…)