|
The S&P 500 Valuation Index or SPVI uses the S&P 500
current dividend and trailing earnings yields together with the yields on
the 91-day T-bill and 90-day commercial paper in an indicator for
determining whether the S&P 500 is over-valued. The relationship of
yields is as follows:
SPVI = (S&P 500
dividend yield + earnings yield) / (91-day T-bill rate + 90-day commercial
paper yield)
The resulting figure is
adjusted by a constant so that 100 = the average for the period 1966-1995.
|
