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Share market returns have three components: dividends, earnings per share growth and changes in the price to earnings ratio. For the overall sharemarket (index fund) in Australia dividend payout ratios are already very high therefore without earnings growth there is not much room for dividend growth. The earnings outlook for Australian companies generally is not good as reaources and banking stocks which are the biggest sectors of the market are both facing cyclical headwinds over the next rew years. Price to earnings ratios are already abive average by historical standards even more so given the subdued earnings outlook. I just do not see it as likely that the All Ordinaries will move up strongly in thenext year or two.I am interested to hear your reasons for being bullish on the market Craft.
Share market returns have three components: dividends, earnings per share growth and changes in the price to earnings ratio. For the overall sharemarket (index fund) in Australia dividend payout ratios are already very high therefore without earnings growth there is not much room for dividend growth. The earnings outlook for Australian companies generally is not good as reaources and banking stocks which are the biggest sectors of the market are both facing cyclical headwinds over the next rew years. Price to earnings ratios are already abive average by historical standards even more so given the subdued earnings outlook. I just do not see it as likely that the All Ordinaries will move up strongly in thenext year or two.
I am interested to hear your reasons for being bullish on the market Craft.
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