The market value of any business is determined by its economic performance. The most commonly applied and highly accessible proxy for performance is the earnings reported by its accountants and auditors. 

S&P index values, index earnings and dividends per share have followed a similar path. The correlation between monthly prices, earnings and dividends, all up nearly 20,000 times since 1871, is close to one. The price-to-earnings (p/e) ratio for the S&P has averaged 15.76 over the long period, with a low of five in 1917 and a high of 124 after earnings collapsed in May 2009 while the index held up to a degree. And dividends held up much better than earnings.

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