Criteria | Value |

Earnings Yield of S&P 500 | 4.91% |

Earnings Yield of Value Stocks | 6.75% |

Earnings Yield of REIT Index | 2.48% |

P/E of 30 Year Bond | 21.92 |

P/E of 10 Year Bond | 23.14 |

P/E of Cash (Savings Account) | 25.00 |

Here is how I obtained these values:

- The P/E of S&P 500 is 20.36. The inverse of P/E is E/P and it is 0.0491. In percentage terms, the earnings yield of S&P 500 is 4.91%.
- The P/E of MSCI US Prime Market Value Index is 14.8. The E/P of the Value Index is 0.0675. In percentage terms, the earnings yield of the MSCI US Prime Market Value Index is 6.75%.
- By doing the same type of calculation with MSCI US REIT Index I arrived at the value of 2.48%. The P/E of the MSCI US REIT Index is 40.3.
- The earnings yield of the 30-year bond is 4.56%. So, the P/E of the 30-year bond is 100/4.56 = 21.92.
- The earnings yield of the 10-year bond is 4.32%. So, the P/E of the 10-year bond is 100/4.32 = 23.14.
- To calculate the P/E of cash, I used the Emigrant Direct’s savings accounts rate as yardstick. The current yield is 4%. So, the P/E of cash is 25.

## 1 comment:

Good insight, I haven't seen a great deal of analysis on the inverse of common ratios.

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