We are enjoying the blessing of a large cash pile, a powerful asset, whether or not markets experience a correction. But there lies the dilemma - will markets reverse, and if not, where is the value in today's markets?
We focus on risk, and one of the main tenets of that is ‘price risk’. We believe that the biggest determinant of future returns is the original price that you pay for an investment. So, at present, the most relevant discussion is whether or not the market and its constituents are cheap. We suggest they are not, although many will disagree with our argument. CAPE analysis (cyclically adjusted price/earnings) from Robert Shiller suggests that the US market remains expensive (especially if industry is currently enjoying peak earnings and margins). It prices the S&P 500 on a multiple of 2...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
