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Session 33: Market Timing Approaches - Valuing the Market
Published 5 months ago
Description
In this session, we look at extending valuation approaches developed for valuing individual stocks to valuing the entire market. We begin by using an intrinsic valuation model to value the S&P 500 as the present value of expected cash flows on the index. While the approach is promising, it is dependent upon historical data and can provide poor signals, if there has been a systematic shift in risk preferences or growth potential. We also look at valuing a market on a relative basis, by either comparing it’s pricing over time or by comparing pricing across markets
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