We have been alerting our clients, primarily through personal discussions and our market updates, about the elevated levels of current stock valuations. Often times, we get questions about the various ways to measure Price to Earnings (P/E) ratios. This piece does a great service in explaining “as reported” earnings vs. future estimates. It also explains the differences in using the traditional model of the Trailing Twelve Months (TTM) Price Earnings ratio vs the more dynamic Cyclically Adjusted Price Earnings Ratio also known as P/E 10. The key takeaway is that by either measure, valuations are stretched.
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About Altus Wealth
Altus Wealth Management, based in Ft. Mitchell, Kentucky is a wealth management firm
providing investment management and financial planning services. Each partner
serving client accounts is a CERTIFIED FINANCIAL PLANNER. Altus serves clients nationwide with a focus on serving clients in the Cincinnati, Northern
Kentucky and Indiana area.
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Evaluating the current P/E ratio of U.S. Equities