Why Using Average P/E Ratio is More Realistic

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				              Why Using Average P/E Ratio is More Realistic

			                Philippe

			                During favorable economic times (boom), company earnings are at record levels. As a result, the high  stock prices and seemingly low P/E ratio's appear acceptable.

But investors are advised to use average earnings over the past 10 years or so to calculate the P/E ratio, and compare that to the historical long-term average. This gives you a more realistic insight in the Price to Earnings ratio....
			            
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	                                ForumWhy Using Average P/E Ratio is More Realistic
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