As mentioned multiple times … with recent examples here and here by almost any metric Capital Market valuations have been and are stretched.
As a reminder this does not mean that markets have to come tumbling down to earth … just that heightened risks of sharper declines may be possible. Also as a reminder, just like our teenager with oversized clothes grows into them … as earnings increase faster than Capital Markets rise, valuations can come back in line! YAY
Updated Valuation Metric from our Friends at JPMorgan
And while still stretched take note of the very far right of the graph as it has smartly turned over as earnings outpaced Capital Market Growth
This is why the Graph is moving in a better direction – huge expected earnings in view….
Nice….
Still no time to swing for the fences, which we never do- but good progress…
Have a Great “Better Valuations” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
