Inflation and Earnings are two factors that are well-known to have a significant impact on the performance of the stock market. Using inflation and earnings data going back to 1900, we use a method of analysis called linear regression to create a formula that forecasts where the stock market will be over the next 10 years. Based on these projections we determine whether or not the current value is in-line with where it should be based on historical inflation, earnings, and price. As the markets move and become more over or undervalued, this strategy will adjust to those market conditions.
S&P Index (IVV)