actuarial assumptions for annual rates of return matter. in general > 6.5 % is the breakeven number balancing contributions, returns, and future payouts. more aggressive estimates mimic 8 %
the actual returns and the statistically probable returns based on reasonable valuation history differ
to with simply at pe and price to sales ratios the expected future return for equities in the next ten years approaches 0 at present valuations despite 9 years of free money, buybacks, and accounting ledgermain
either price or earnings adjust. and tacking into the wind of less available and more expensive money makes the former more likely than the latter
price does matter
the actual returns and the statistically probable returns based on reasonable valuation history differ
to with simply at pe and price to sales ratios the expected future return for equities in the next ten years approaches 0 at present valuations despite 9 years of free money, buybacks, and accounting ledgermain
either price or earnings adjust. and tacking into the wind of less available and more expensive money makes the former more likely than the latter
price does matter
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