【How Cheap Are Stocks Now? As Cheap as They Were in 2009!】
CLEC Club / Writing date: Jan 14, 2019 Why? At the end of December 2009, the S P Y stock price was $112, and 2009 dividends paid were $2.1. In 2018, SPY annual dividends paid were $5.1.
CLEC Club / Writing date: Jan 14, 2019
Why?
At the end of December 2009, the S P Y stock price was $112, and the 2009 dividend distribution was $2.1.
In 2018, SPY annual dividends paid were $5.1. If the current SPY price were $272=【$112 x ($5.1/$2.1)】, it would be as cheap as SPY was in 2009. Last Friday, 01/11/2019, the SPY price was $258.98. So the U.S. stock market is quite cheap now, and even cheaper than in 2009.
If it rose from $112 in 2009 to $258.98 today, then starting now, nine years later in 2028, SPY would reach $598.84=【$258.98 X （$258.98/$112）】. And because future dividends will increase, by the end of those nine years in 2028, SPY at $598.84 would still be just as cheap as it is now.
So value investors look at earnings growth and dividend distributions. U.S. companies continue to grow, and the long-term returns from investing in U.S. indexes are very stable.
Investors should look at value, not stock price.
If you missed the big market move since 2009, now is the same kind of big opportunity as 2009. You should seize it and not lose another good long-term money-making opportunity.
Speculators look at stock prices. Investors look at value and stock prices. Buffett buys as long as the price is below value and meets his expectations; he does not wait! Speculators look at stock prices and wait by guessing, guessing, and guessing!
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