Briefs

The brief’s key findings are:

• Stocks have diverged from historic averages for periods of 10 to 20 years.

• This divergence reflects fluctuations in: 1) corporate earnings; and 2) investors’ assessments of those earnings.

• Corporate earnings vary, but tend to stabilize and return to long-term economic trends within a few years.

• In contrast, investors’ valuations have been more volatile, taking decades to fully stabilize.