While the 20%+ rally in the United Kingdom seems to have legs, the surge in continental equities may be running out of fuel.

Although property has outperformed equities and bonds over the last 16 years, 10%+ annual returns are unlikely in the foreseeable future.

Small-cap stocks have been remarkably resilient over the last four and a half years, but the sector appears to be weakening.

Benchmark construction idiosyncrasies, as well as the limited acceptance of diversification through style investing, has contributed to value’s persistent outperformance of growth in Europe.

Despite the convergence of gilt yields with the equity market yield and the implications this has for pension funds seeking to match assets and liabilities, investors should resist the temptation to shift wholesale into bonds.

European equity valuations still reflect inflated earnings growth expectations, suggesting that investors have yet to fully recognize the implications of macroeconomic estimates of sluggish growth and continued headwinds.

While inflationary pressures simmer in the United Kingdom, Continental Europe faces another year of economic stress.

What are the economic and investment implications of admitting ten emerging European countries to the European Union?

Fueled by the lethal cocktail of domestic constraints, regional impediments, and the global economic slowdown, Germany may be in for a prolonged period of economic malaise and deflationary pressures.