"
This doesn't seem like a wise strategy, until you
compare it to the alternative,
Anthony Rocchi, Rexsolom
– as the table illustrates:
(See: Figure 2).
“Between 1961 and 1969 the
economy in the US was on fire,
but the returns during that period
weren't stellar and PEs actually
contracted,” says Rocchi. “The
market actually delivered returns
similar to those in the low growth
environment between 2008 to 2014.
“So you would have made
comparable returns off completely
different PE levels and in vastly
different growth environments,” he
says. “That has to tell you that the
market isn't one dimensional.”
Rocchi believes that the message
for investors is buying an
expensive market is not always an
irrational choice.
Figure 2: Source: Rexsolom
ISSUE 4 – JULY 2015
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