Date (Month, Year) ………………………………………..March 2000……………..March 2009
Index Price ……………………………………………………1442.21…………………….751.35
Dividends ………………………………………………………$16.76……………………..$27.25
Earnings ……………………………………………………..$50.94……………………..$6.86
Dividend Yield (%) ………………………………………….1.16%………………………3.60%
Price Earnings Ratio …………………………………………28.31……………………..110.37
Consumer Price Index……………………………………….171.20…………………….212.71

Index Rate of Return without Dividend Reinvestment (%)………………………..[-6.91%]
Index Rate of Return with Full Dividend Reinvestment (%)……………………….[-5.27%]

Inflation Rate (%) ………………………………………………………………………….2.44%
Index Rate of Return without Dividend Reinvestment (%) ……………………….[-9.13%]
Index Rate of Return with Full Dividend Reinvestment (%)……………………….[-7.52%]

In retrospect, does this look like, in valuation terms, the same type of bottom that is likely to launch a new secular bull market? Not even close. With QE2 coming to a close, many of the earnings that the companies [particularly financial] are destined, also, to come to an end.

The constant infusion of POMO $5 Billion – $8 Billion Federal Reserve proxy buying to support Equities and Bonds is also finished. The Commodity markets, also recipients of the QE2 effect, destined to end. Not until we hit a market low, marked by increasing earnings, dividend yields will we have the quality P/E that marks the true bottom, from which another secular bull market can launch.

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