High Valuations Don't Mean Low Returns

Valuation is an awful timing tool it's terrible so it is best not to try to time the market based on where valuations are going. Valuations have little predictive power on a one-year forward return and they tend to persist. High valuations today do not necessarily mean that you're going to have low returns in the next 12 months but what they do mean is that you're likely to have more muted returns over the next five to ten years.

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