Monthly Market Report - February 2018
1st February 2018
Stockmarkets have started 2018 in fine form. One measure of this optimism come from a US investor organisation called the AAII which runs a signal called the Bulls index. This closely watched measure is currently recording its highest level since 2003. But this surge in bullishness has also pushed equities into expensive territory. Another measure, also closely watched by investors, is something called the CAPE - a yardstick on valuations using what is in effect the long-term average price to earnings ratio. This is currently registering a PE of 33.53 times corporate earnings for US stocks - the long-term average is 16.81. In fact, this CAPE measure - also called the Shiller PE after the economist Robert Shiller - is nearly 20% above the same level last year and is currently at exactly the same level as the peak in 1929.
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