On the minds of advisors
Top questions on the minds of advisors
See what your peers are asking and read answers from our team of Global Market Strategists.
January 19, 2018
Do valuations matter?
The S&P 500 has had an impressive start to the year, rising over 4% year-to-date with only three days of negative performance. However, as the equity market has moved higher, investors have become increasingly concerned about valuation. While it is difficult to ignore the fact that the S&P 500 forward P/E ratio currently sits at 18.5x, well above its 25-year average of 16.0x, we believe elevated valuations may be justified for three reasons