I Am Collecting Magnificent 7% Yields At Bargain Prices
The article discusses the current valuation of large-cap stocks compared to small and mid-cap stocks. It highlights that large caps are trading at a high P/E ratio of 20.8, while small and mid-caps are at a more attractive 16x P/E. Additionally, municipal bonds are noted for their stability and tax-free income potential.
- ▪Large-caps are trading at a staggering 20.8x P/E, a dangerous valuation disconnect last seen in 2001.
- ▪Without valuation expansion over the last 15 years, the S&P 500 would be 33% lower.
- ▪Small and mid-caps are locked in at a historically reasonable and highly attractive 16x P/E.
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