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Put the P/E ratio in timeout for now

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Summary
Nutrition label

85% Informative

The forward price-earnings (P/E) multiple has limited value during normal times.

The E is based on analysts’ estimates for the near future.

When the outlook for business is increasingly uncertain and rapidly changing, it can take time for analysts to adjust that E.

Many companies have not yet factored the impact of tariffs into their guidance.

From BofA : March card spending per household was up 1.1% year-over-year ( YoY ), according to Bank of America .

Freddie Mac : The average 30-year fixed-rate mortgage rate declined to 6.62% from 6.64% last week .

Most homeowners are not particularly sensitive to movements in home prices or mortgage rates.

Analysts expect the U.S. stock market could outperform the economy, thanks to positive operating leverage.

The long game remains undefeated, and it’s a streak long-term investors can expect to continue.

Of course, this does not mean we should get complacent. There will always be risks to worry about.