010719_WMC_Figure1 LPL Financial Research, stock, S&P 500, peak to trough declines, forward PE ratio, price to earnings ratio

IMPORTANT DISCLOSURES

Source: LPL Research, FactSet 01/04/19

6.9

6.8

6.7

6.6

6.2

Jan

Feb

Mar

Apr

May

Jun

Jul

6.5

6.4

6.3

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Aug

Sep

Peak-to-Trough Declines in S&P 500 Index Forward PEs >3 within 1 Year (Post–1995)

Oct

Source: LPL Research, FactSet 11/02/18

IMPORTANT DISCLOSURES

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PE Decline

S&P 500 Returns Over Next 12 Months

Big Drops in Stock Valuations Historically Followed by Strong Rallies

IMPORTANT DISCLOSURES

This research material has been prepared by LPL Financial LLC.To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

RES 62697 0119 | For Public Use | Tracking #1-808747 (Exp. 01/20)

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risk including loss of principal.

The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: A higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio. All indexes are unmanaged and cannot be invested into directly. All performance referenced is historical and is no guarantee of future results.