TY - JOUR T1 - Does the Fed Model Travel Well? JF - The Journal of Portfolio Management SP - 68 LP - 75 DO - 10.3905/jpm.2006.661376 VL - 33 IS - 1 AU - Owain ap Gwilym AU - James Seaton AU - Karina Suddason AU - Stephen H Thomas Y1 - 2006/10/31 UR - https://pm-research.com/content/33/1/68.abstract N2 - Equity markets are frequently valued on the basis of the relative yields of stocks and bonds. The most widely known of these comparisons is the Fed model; stocks are considered cheap when their earnings yield exceeds a long bond yield. Comparisons examining the performance of this metric and more traditional valuation measures such as earnings and dividend yields in six international markets are interesting. The Fed model turns out to be poor in explaining long-run returns, while it has some merit as a short-term tactical asset allocation tool.TOPICS: Quantitative methods, equity portfolio management, security analysis and valuation ER -