Much Ado About Nothing
Is all the talk about high equity risk premiums missing the bigger picture?
Is all the talk about high equity risk premiums missing the bigger picture?
If tech stock earnings disappoint again in 2007, overall earnings are likely to fall short of expectations.
Equity valuations seem reasonable, but watch out for mean-revision of earnings growth.
Utility of ETFs for institutional investors remains somewhat limited, but has increased.
Valuations remain compressed, making identification of relatively attractive opportunities hard to find.
In order to be bullish, investors must make some heroic assumptions.
Valuations make the case for overweighting the very largest firms within a U.S. equity allocation.
In a world of overvalued financial assets, high-quality shares look to be one of the last bargains left.
In all developed markets, but particularly the United States, investors’ bias in favor of domestic equities is irrational and sub-optimal. We recommend that investors` strategic equity allocations be equally divided among the Americas, Europe, and Asia.
Consensus earnings expectations seem too high considering the strong market headwinds and advanced nature of the earnings cycle, while valuations remain elevated.