What could prevent a repeat of 2015 for markets?

Disconnect between stock markets and equity returns

Tomas Johansson, portfolio manager at Skagen Global, takes a closer look at the growing disconnect between rising stock markets and the return on equity.

The general outlook going into 2016 is similar to what we saw coming into 2015. The Federal Reserve has begun tightening its policy rate, creating more divergence among central banks. Economic growth in some of the largest global emerging markets will continue to falter. In addition, investors are also faced with continued low inflation stemming from falling commodity prices and heightened political tensions around the world. So what could prevent a repeat of 2015 in the markets? The answer is the big disconnect. Over time, return on equity typically goes hand in hand with the general...