- By dissecting the S&P 500 per valuation quintiles we see that only parts of the market are overvalued.
- Historically, buying the lowest PE quintile stocks has increased annual returns by 360 basis points.
- High PE stocks have large market capitalizations which force you to own more of them through index funds, increasing your risks and lowering your returns.
Beyond the top news stories about central banks increasing stimulus to fight the BREXIT or sluggish economic data with high hopes for the future, there is one recurrent theme that still flies under the radar. The recurring theme is that financial markets are overvalued. More →