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Why I Stopped Reading 10-Year Rolling Return Charts
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Why I Stopped Reading 10-Year Rolling Return Charts

Seeking Alpha·Envision Research·about 1 month ago
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Home Market Outlook Today's Market Summary The S&P 500 has rebounded to near-record highs, defying warnings from 10-year rolling return and P/E regression charts. Reliance on 10-year rolling return correlations is flawed due to non-independent, overlapping data points that undermine statistical validity. Regression to the mean is misapplied to equity returns, as secular forces like declining tax rates and technological progress drive long-term profitability upward. Using 10-year rolling correlations for investment decisions can be especially problematic given the current combination of equity prices and equity profit growth potential. Looking for a helping hand in the market? Members of Envision Early Retirement get exclusive ideas and guidance to navigate any climate.…

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