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home / news releases / TIP - The Shaky Foundation Behind 3 Of 2019's Most Popular Charts


TIP - The Shaky Foundation Behind 3 Of 2019's Most Popular Charts

A belief in steady and predictable mean reversion has cost investors a lot of money this cycle.

The problem with applying mean reversion to investing is that market averages are not written in stone.

Here are three examples:

CAPE Ratio

If there was a contest for the chart that’s spooked the most investors since 2009, I’m confident this would win:

The S&P 500 has traded above its historical CAPE average 97% of the time since the last recession. A strategy that avoids stocks when valuations are above average would have exited the market in May

Read more ...

Stock Information

Company Name: iShares TIPS Bond
Stock Symbol: TIP
Market: NYSE

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