Market Valuation Charts: 5/4/09
![Bonds v Equities Bonds v Equities](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_lossy/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd5e1a2b0-9332-42fe-9915-13735be1cc20_929x674.gif)
Chart: Bond Yield over Equity Yield. 10-year treasury yield minus inverse of Graham P/E Ratio (10-year average equity earnings yield). Current value: -2.8% (5/4/2009) Low value: -4.9% (3/9/2009)
![10-Year Return 10-Year Return](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_lossy/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fccc5ca1f-3005-4db7-bdd1-493b512b47e5_929x674.gif)
Chart: Trailing 10-year return. Current value: -3.8% (5/4/2009) Low value: -5.9% (3/9/2009)
![P/E Ratio 1881 P/E Ratio 1881](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_lossy/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd7084167-efb9-4803-aed7-daccf61d865c_929x674.gif)
Chart: 10-year trailing Graham ("Real") P/E Ratio. Price of the S&P 500 divided by the 10-year average of earnings, inflation adjusted.
Current value: 16.1x (5/4/2009) Low value: 11.9x (3/9/2009)
One conclusion from the above charts is that based on the 128-year average, the market (as represented by the S&P 500) is fairly valued. (Data from S&P, Robert Shiller, and the St. Louis Fed.)
See also: Market Valuation Charts: 10/08