Old age doesn't kill bull markets
March 24, 2015 01:00:00 AM
A long expansion is a persuasive argument for buying stocks even though forward price-to-earnings ratios are historically high. Investors are likely to be willing to pay more for stocks if they perceive the economic expansion could last, let's say, another four years rather than another two years. The more time we have before the next recession, the more time earnings can grow to justify currently high valuations.