"Researchers say p/e, dividend yield make poor prognosticators": So a headline in the July 10 P&I declares. But whose research?
In the accompanying story, two researchers examining the years 1872 through 1999 found "p/e ratios and dividend yield provide unreliable forecasts of future returns."
But another researcher found, as the story reports, "the relationship among p/es, dividend yields and returns were significant from 1926 through the 1980s." That 64-year period is contrary to the other researchers' finding.
Whose research you accept probably depends on whether you are a growth stock or value stock investor. Or, where you stand depends on where you sit.
