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The Holbrook Relative Value Index

  • Scott Carmack
  • May 11, 2016
  • 1 min read

Updated: Mar 27, 2024




With the abundance of valuation metrics in the world of finance, it can be difficult for investors to gauge relative value amongst different asset classes.  The price to earnings multiple on the S&P 500 indicates that equities are fully valued, and some measurements (the Schiller PE or GAAP PE) indicate equities to be overvalued.  Meanwhile, treasury yields are at, or near, historic lows.  Holbrook has developed a proprietary Relative Value Index that gauges the value of equities relative to treasuries, and it indicates that equities are still cheap.  The chart below tracks the Index from 1962 to present.


 
 

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