RT Journal Article
SR Electronic
T1 Using the Supply-Side Approach to Understand and Estimate Equity Returns
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 76
OP 85
DO 10.3905/jpm.2006.661378
VO 33
IS 1
A1 Charles P. Jones
A1 Jack W. Wilson
YR 2006
UL https://pm-research.com/content/33/1/76.abstract
AB A supply-side analysis of the average stock returns over 1926-2004 helps us see how components that include real earnings growth and the price-earnings ratio have contributed to the average total return. The long-run sustainable average equity return can be expressed as a benchmark expected equity return. An innovation is that investors can use a supply-side model as a disciplined framework for estimating average equity returns over much shorter periods than the 80-year sample analyzed.TOPICS: Quantitative methods, equity portfolio management, security analysis and valuation