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Jeremy Schwartz: Wisdomtree & the ETF Revolution

The Security Analysis Podcast

CHAPTER

The Link Between Stock Market Returns and PE Ratio

The speakers discuss the average return of the stock market over the past 200 years and its direct correlation with the average price-to-earnings ratio (PE ratio). They compare the current PE ratio to historical data, suggesting a lower future return. Additionally, they analyze the equity risk premium of stocks and bonds and discuss strategies for adjusting the allocation between the two based on bond yields and earnings yield.

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