Standard and Poor's global equity strategist, Alec Young has been bearish on stock markets since June this year, but like many other market commentators, he’s turned bullish in recent days.
 |
Rose | Mueller | Stock4B | Getty Images |
"A lot of (the) bad news has been priced in as a result of the pretty dramatic volatility that we've seen around the world in the last couple of months," Young told CNBC on Thursday. "You can't be a bear forever. I think we were a little ahead of the curve with our caution in June, it's worked extremely well."
It’s time, he says, for investors to rebalance their portfolios with a tilt towards equities, particularly after the global sell-off in August.
“In light of the declines, we are starting to see value and a lot of the allocations for our clients - whether it's emerging market equities, Asian equities, U.S. equities, Europe,” he said.
Major indices like the S&P 500 [.SPX 1200.21 
1.59 (+0.13%) 
], Britain's FTSE 100 [.FTSE 5331.49 12.90 (+0.24%) ] and Japan's Nikkei [.N225 8793.12 29.71 (+0.34%) ] have shed around 10 percent over the past three months.
"We think the risk-reward equation has improved for global equities," Young added, referring to the increasingly attractive price-to-earning ratios (P/E) of major markets. The FTSE 100, for example, now trades at a one-year P/E of 10.4; the S&P 500 at 13 and the Nikkei at 14.5. That's lower than the 12 times earnings the FTSE was trading at in June, and 15 times earnings for both the S&P and Nikkei. Read more
No comments:
Post a Comment