Part 7/9:
Beyond the immediate implications of tariffs and inflation, there are underlying dynamics pertaining to stock valuations. Historically, high prices for stocks relative to their earnings have led to subdued returns in subsequent years. Current high valuations suggest that overcoming them will rely heavily on future company earnings growth, which remains uncertain.
Understanding these valuation metrics could play a significant role in investment strategies moving forward. While the market has experienced exceptional returns in recent years, the sustainability of such growth is uncertain.