Low Valuations Means a Good Time to Buy
January 30, 2012
These are uncertain times. Nobody knows exactly how the situation in Europe will impact global stocks, but that doesn’t mean owning equities is a bad idea. US stocks are trading at extremely attractive levels relative to history, and markets like to climb a wall of worry. So if you’re sitting on the sidelines waiting for an “all clear” signal, you might miss out. …
Valuations for U.S. equities have been stuck below the five-decade average for the longest period since Richard Nixon
’s presidency, a sign investors don’t trust earnings even after a three-year bull market. Analysts estimate profits
in the Standard & Poor’s 500 Index will reach a record $104.78 this year after increasing 125 percent since the end of 2009, the fastest expansion in a quarter century, according to data compiled by Bloomberg. American companies are boosting income so much that even after stocks doubled, the S&P 500
hasn’t traded above its 16.4 mean ratio for 446 days, the longest stretch since the 13 years beginning in 1973.
Read the rest on Bloomberg Personal Finance.
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.