As is shown in the table and graph below, stock prices consistently fluctuate around the intrinsic values of corporations and the general economy. This is reflected by indicators like stock price-to-earnings (PE) ratios and dividend yields which show when stock prices are relatively high compared to stable measures of fundamental value like earnings and dividends. High PEs and/or low dividend yields indicate stocks are overvalued and should be sold, while low PEs and/or high dividend yields indicate stocks are undervalued and a good buy.
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