BofA Says S&P 500 Real Earnings Yield is Lowest Since Harry Truman Was President
- Without earnings growth, investors risk losses from inflation
- BofA favors ‘inflation-protected yield,’ such as energy
Harry Truman seated in the White House library, circa 1950.
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The real earnings yield on U.S. stocks hasn’t been so low since Harry Truman was president and the Cold War was just starting, according to Bank of America Corp. strategists.
The S&P 500 Index currently has a real earnings yield of -2.9%, meaning that without continued growth in company results, investors would lose 2.9% when adjusted for inflation, the strategists led by Savita Subramanian wrote in a note on Wednesday. “Last time the real earnings yield was this negative was 1947.”