In preparing for my September 2024 Forbes article, I stumbled upon a shocking set of nearly identical, devastating economic statistics regarding the U.S. economy.

Graphs and data referenced in this episode comparing the periods of 1975 to 1980 versus 2019 to 2024 can be found at: https://www.alignewealth.com/blog/research-highlights-09-04-2024

For more information, please visit: https://www.alignewealth.com/

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As discussed in detail last summer (see Research Highlights and Forbes article), comparing the Earnings Yield on stocks (using the S&P 500 Cyclically Adjusted Earnings Yield [CAEY]) to the Risk-Free Yields on U.S. Treasury Bonds can have an elucidating effect on an investor's favor towards equities or away from them.

Recall that Earnings Yield is equal to Earnings Per Share divided by its Stock Share Price. By simply inverting the Price-to-Earnings (PE) Ratio, you attain the Earnings Yield, which standardizes a stock's attractiveness as a cash flow instrument (typically stocks are bought for capital growth or dividend yield or some combination thereof) relative to other cash flows instruments (typically bonds for fixed income purposes).

Updated Research Highlight with data referenced in this episode found at: https://www.alignewealth.com/blog/research-highlights-08-07-2024

Copyright © 2024 Ivan Illan, AWAIM®

In this month's episode, Ivan Illan, Founder & CIO at AWAIM®, explores the dichotomy of two segments of the capital markets - U.S. high yield bonds and U.S. small cap stocks. Both of these segments are predominantly charaterized by below investment grade credit ratings and typically demonstrate high price correlations. However, the past few years have not held this relationship. Ivan examines what may be driving this valuation differential, and what that may mean for risk assessment on a forward-looking basis.

For more information on this subject, please visit the charts referenced in this episode at https://www.alignewealth.com/blog/research-highlights-07-03-2024

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