Today, the 10-year yield is 1.89 percent and touched an all-time low of 1.67 percent four months ago. Consumer prices increased 3 percent from the previous year in December, according to Labor Department data.
"In the 1970s, low P/Es were accompanied by high inflation and high interest rates," Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, which oversees $40 billion. "That's obviously not the case today, where the culprit is uncertainty about the global economy and financial system."
Hayes Miller, who helps oversee about $46 billion as the Boston-based head of asset allocation in North America at Baring Asset Management Inc., said the U.S. environment looks good both economically and in terms of earnings. "It's going to be a long clean-up, but we do expect markets to be up this year."