The best way to use a P/E ratio for stock analysis is as a supplement when comparing companies within the same sector or industry. However, it is a bad idea to use P/E multiples to benchmark a technology company to a consumer staples company.
Mutual Funds, index funds, or ETFs -- which is better? With $1-trillion flowing from actively managed mutual funds to passively managed index funds and ETFs, the answer may seem obvious. However, like most things in life, these numbers need some context before understanding the reasons for the recent shift in investor behavior.