S&P 500: Valuation analysis is pointless – Charles Schwab

The forward price/earnings ratio for the S&P 500 has plunged. In a ‘normal’ environment, that level might attract value-oriented buyers, but the rub today is different, in the opinion of Liz Ann Sonders from Charles Schwab.  

Key quotes

“Valuations are not likely to be a catalyst, at least not until the ‘E’ in the forward P/E finds its bottom.”

“Estimates have been coming down; but in my opinion, they have much further to go, at least for the second quarter.”

“Technicians can point to dramatically oversold conditions; but again, that may not be enough.”

“In terms of the stock market and advice for investors, don’t attempt to time a bottom, especially if you are making all-or-nothing investing decisions.”

“Market bottoms tend to be processes over time, not moments in time; just like investing should be a process over time; never about a moment in time. And remember, panic is not an investment strategy.”