Fairval

Notes on Indian equities, sectors and economy

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Bond Yield comparision still unfavourable for equities

Posted by fairval on December 19, 2011

I had written about Earnings Yield and Bond Yield comparision last in March (Earnings yield chart shows markets should go down).

Here is a new chart on the same from an Angel report, this has longer data.

Earnings Yield versus Bond Yield

What this chart shows is not good for the market. While earnings yield has edged closer to bond yields as markets fall, bond yields are still higher, which means markets will remain bearish. As the chart shows, best returns are made when bond yield falls below earnings yield. Lesson for equity investors – hold your horses, a better time to buy will come

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One Response to “Bond Yield comparision still unfavourable for equities”

  1. Would be interesting to look at an update version of this chart with Nifty @ 5650

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