As
the stock market continues its seemingly relentless march higher, it’s
reasonable to expect that the mood of investors would be positive. However,
analysts are getting concerned that optimism is reaching levels seen before at
major stock market peaks. According to the Wells Fargo/Gallup Investor
and Retirement Optimism Index, the level is at its highest since September of
2000. The latest boost in optimism pushed the index almost 100 points
higher over the past 18 months. The 98 point hike in that time frame is
the largest increase in the 20-year history of the index (other than during
sharp rebounds from sudden plunges).
Womack Weekly Commentary September 18, 2017 The Markets “In theory, there is no difference between theory and practice, in practice there is.” Yogi Berra was talking about baseball, but the concept also applies to diversification, according to the GMO White Paper, The S&P 500: Just Say No . From the title, you might think the authors – Matt Kadnar and James Montier – don’t like U.S. stocks. They do: “Being a U.S. equity investor over the past several years has felt glorious. The S&P 500 has trounced the competition provided by other major developed and emerging equity markets. Over the last 7 years, the S&P is up 173 percent (15 percent annualized in nominal terms) versus MSCI EAFE (in USD terms), which is up 71 percent (8 percent annualized), and poor MSCI Emerging, which is up only 30 percent (4 percent annualized). Every dollar invested in the S&P has compounded into $2.72 versus MSCI EAFE’s $1.70 and MSCI Emerging’s $1.30.” The au...
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