Return Vs. Price in Investing

Investing at high prices leads to lower returns over time. Market history shows that starting at top price levels often leads to significant losses eventually. To make substantial profits and have a long bull market, high unemployment, depressed profit margins, and low price-earnings ratios are essential. Multiplying depressed earnings by a low P.E. yields significant returns, while multiplying high earnings by a high P.E. results in limited returns.