Dialing In The S&P 500’s Amplification Factor

Seeking Alpha | Sep 22, 2020 at 11:13 AM
  • The dividend futures-based model we use to project the future for the S&P 500 (Index: SPX) presents some unique challenges from time to time.
  • In 2020, one of those challenges has been coping with changes in the model’s amplification factor (m), which, after more than a decade of holding a virtually constant value, suddenly became a variable.
  • Assuming investors are continuing to focus on 2020-Q4 in setting current-day stock prices, it seems to have settled at a positive value of 1.0.