A.I.M. Users Bulletin Board

[Toofuzzy]

Hi Tom

I don't know if I am thinking of this the right way but a few thoughts.

If interest rates really high then even if stocks near high value when combined with interest rates as rates come down stocks will go up.

If interest rates near zero but stocks at lower value ( p/e 15 ) as rates go up stocks will go down.

But in the shorter term you are probably correct.

I was wondering if the formular should be p/e - inflation + interest rate.

The reason is inflation increases the value of most assets, allows price increases, and reduces the real cost of loans.


Just a thought.

Toofuzzy