Price Is What You Pay. Value Is What You Get – Chart Of The Day
Over any 30-year period the beginning valuation levels, the price your pay for your investments has a spectacular impact on future returns.
As you will notice, 30-year forward returns are significantly higher on average when investing at 10x earnings as opposed to 20x earnings or where we are currently near 25x.
The point to be made here is simple and was precisely summed up by Warren Buffett:
‘Price is what you pay. Value is what you get.’