S&P 500-to-GDP Ratio Shows Stocks Worth Buying: Chart of the Day
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U.S. stocks look reasonably priced when the value of companies is measured against the size of the country’s economy, according to David R. Kotok, Cumberland Advisors Inc.’s chairman and chief investment officer.
The CHART OF THE DAY shows the comparison he made in a report two days ago: between the total market capitalization of companies in the Standard & Poor’s 500 Index and nominal gross domestic product, which isn’t adjusted for inflation. The chart displays monthly readings for the last 12 years.