P/E Multiple Expansion Accounted for 135% of the S&P 500 Return in 2015: Goldman

In one year from now, stock market investors, as benchmarked by the S&P 500, can expect a mere 1.1 percent yearly return on their investment, predicts a Goldman Sachs research piece. The blame for this relatively pedestrian performance is a price earnings multiples finding gravity.

P/E multiple - Watch for lower price earnings multiples

As the U.S. Federal Reserve begins to raise interest rates, on the path to making “cash” a viable investment option once again, the Goldman report said it expected a stock market value adjustment in forward P/E multiples, contracting to 16 times earnings in the second half of 2015. With forward P/E multiples on consensus earnings having risen by 2 percent in 2015, up to 17.1 percent from...