Is it time to get back into stocks?
Roger Lowenstein appears to think it is time to invest in stocks. In an article in the NY Times Sunday Magazine, he states
“Stocks are simply a claim on future corporate earnings: if you can buy those claims at a discount, you should do well. Wise men will disagree on the meaning of “at a discount.” But American business is profitable even today. And the Standard & Poor’s 500 stock index is trading at only 12 times the expected earnings of the underlying stocks over the next year. Inverting that ratio, stocks have an earnings yield of 8.5 percent. (Each $100 of stocks is backed by $8.50 of expected earnings.)”
(http://www.nytimes.com/2010/08/29/magazine/29fob-wwln-t.html)
Also, see previous post related to this issue
Meanwhile, on the lack of clear policy prescriptions for US economic malaise, see: