Bear Market S&P 500 P/E Contraction History

Bear Market S&P 500 P/E Contraction History Shows that there was. 35% contraction of P/E from 19 to 11.5 in modern times. Who knows what the case will be in next recession ams who knows when the recession will occur.

These words “This time could be different” are dangerous but I dare to speak them as low interest rate world due to government intervention may be a factor. If 10 year Govt  Bonds only Yield 0> to 2% it seems unlikely they S&P 500 P/E would be 11 implying 9% Earnings Yield which be 7% earnings yield spread over Govt Bonds. 

Usually when stocks have had a beat market bonds have some well. However due to abnormally low interest rates in next recession cycle this factor may only produce moderate returns.