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Weekly Commentary

Equity Selloff: What Inning Is It?

May 13, 2022
Jimmy Jean • Randall Bartlett • Francis Généreux • Tiago Figueiredo • Hendrix Vachon

This is probably one of the most chaotic economic and financial environments we’ve ever seen. But high volatility can make for attractive market opportunities—if you can stomach the swings. Some investors have begun asking whether it’s time to pivot to stocks. Right now, the forward price-to-earnings ratio is at about 18, which is still above its 40-year average of 15.5. Since hitting an all-time high in September 2020, however, the S&P 500’s forward price-to-earnings ratio is two-thirds of the way back to its long-term average. If the recent selloff continues, equities could soon look pretty cheap.

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