The trend line for the real return is r = 1.3056 / CAPE^0.076.
11/21/2010
CAPE Ratio vs Real Return for S&P500
From Robert Shiller's S&P500 data at http://www.irrationalexuberance.com/, the following chart shows the relationship between the cyclically adjusted price/earnings ratio and the annualized real return for the next 10 years (total return).
The trend line for the real return is r = 1.3056 / CAPE^0.076.
The trend line for the real return is r = 1.3056 / CAPE^0.076.
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