S&P500 Index (2019)

Putting fears of rising interest rates and tariffs aside, it's time to re-visit the S&P500 fair market value. It's been 6 months since we last posted this topic. Back on September 22, 2017 we posted S&P500 Index (2018). In that post we evaluated 5 long-term market trends (1932 to 2017) and 5 (post-recession) short-term market trends (2010 to 2017). That analysis included 3 to 4 sources for earnings data and 2 sources for dividend data along with year-ahead projections for the S&P 500 Index. At that time we were projecting the S&P500 Index to be at 2645 by March 31, 2018. Currently the index sits at 2786. In this post we will update the input data and projections for the remainder of 2018. Specifically, we will compare expected market valuations based upon both short-term & long-term trends for the following:

 Log (S&P 500 Index Price) vs. Time - Charts 1 & 2  S&P 500 Index Price vs. Earnings - Charts 3 & 4  S&P 500 Index Price vs. Dividends - Chart 5 & 6  Log (S&P 500 Index Price) vs. Log (Earnings) - Charts 7 & 8  Log (S&P 500 Index Price) vs. Log (Dividends) - Charts 9 & 10

First, let's summarize the 5 short-term formulas with their respective coefficients of determination:

(Expected Value)S&P500 = 365.42 x (1.116054837)(YR-2000) , R2 = 0.9631 (Chart 1) (Expected Value)S&P500 = 30.287 x (Earnings) - 956.11, R2=0.6265 (Chart 2) (Expected Value)S&P500 = 49.538 x (Dividends) + 14.672, R2 = 0.9583 (Chart 3) (Expected Value)S&P500 = 2.7919 x (Earnings)1.4292 , R2=0.6253 (Chart 4) (Expected Value)S&P500 = 56.174 x (Dividends)0.9669 , R2 = 0.9614 (Chart 5)

Second, let's summarize the 5 long-term formulas with their respective coefficients of determination:

(Expected Value)S&P500 = 697.34 x (1.071114826)(YR-2000) , R2 = 0.9733 (Chart 6) (Expected Value)S&P500 = 20.507 x (Earnings) - 11.444, R2 = 0.9134 (Chart 7) (Expected Value)S&P500 = 52.492 x (Dividends) - 58.342, R2 = 0.9391 (Chart 8) (Expected Value)S&P500 = 12.571 x (Earnings)1.0978 , R2 = 0.9464 (Chart 9) (Expected Value)S&P500 = 20.472 x (Dividends)1.2588 , R2 = 0.9706 (Chart 10)

Third, let's summarize the input data for 5 different periods between 3/31/2018 and 3/31/2019:

(Table 1)

Fourth, let's compute the expected values for the S&P500 Index for each period using the 10 formulas and weight the results by the respective coefficients of determination for each formula:

(Table 2)

See original post for charts and tables https://dividendtotalreturn.net/sp500-index-2019/

Submitted March 11, 2018 at 07:00PM by DTRS_Investing http://ift.tt/2HpSt7Z