Jul 27, 2021
This week we discuss how advances in technology and dropping costs have made it better for investors. Has it ever been this good? Maybe investors worrying about payment for order flow are worried about the wrong things? Looking back when there was no dividend reinvestment and high commissions, it would have cost you an arm and a leg to replicate the index. Then we discuss updates to the S&P 500 earnings estimates and forward PE valuations. How things have changed from March of 2020.
How bid/ask spreads have narrowed greatly over the years.
Decimalization vs. fractions in trading
Higher commissions changed to zero commissions
Payment for order flow
Dividend Reinvestment
Before index funds no way to replicate the S&P 500 Index
How earnings estimates have risen since March of 2020
Earnings estimate ranges for the S&P 500 Index
Forward PE Ratios
Historical Averages PE Ratio S&P 500 Index
Calculating the forward PE
Mentioned in this Episode:
JP Morgan Guide to the Markets https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/
Derek Moore’s Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&