There is a difference in P/E and the return an investor gets in the form of dividends & capital gains.
A P/E of say 20 is 5% for the company but the snag is will that 5% be passed on to the owners (shareholders) in the form of dividends and capital appreciation of the share?
Normally in an impending recession forward earnings guide is dramatically reduced thereby reducing the prospective P/Es and this is the reason P/Es can drop from say 20 to 10 in anticipation of that because the real P/E is based on past earnings, not future ones.
That said, however, if we look at P/E drops during the GFC , the bank interest rate then was 4% which many took as a safe haven.
Nowadays, however , the interest is bugger all and those fleeing to cash have little alternative except gold and a handful of recessionproof stocks. In a recession realestate usually fairs as bad as the average stock.
If we have a depression like the 1930s, nothing's a sure thing because real gold could be confiscated by a near bankrupt Governments.(EG: The Gold Reserve Act USA 1934)
