SNAPSHOT2 min read

Where are the world's cheapest stock markets right now?

In this video, Duncan Lamont assesses the state of valuations around the world following the rallies of the first quarter.

09/05/2019

Authors

Duncan Lamont, CFA
Head of Strategic Research, Schroders

The final few months of 2018 were carnage for stock market investors. Everything was falling and the emotional chimp inside people’s heads was screaming ‘sell’. But for those that were able to resist that emotional urge, the first three months of 2019 have been a really fruitful time to be invested.

Japanese equities are up 8%. UK, Europe and emerging markets are up 10%, give or take, and the US almost 14%. But the problem for long-term investors is that strong performance means that everything has just got that bit more expensive.

Valuations are one of the most powerful indicators of long-term returns, even if they are pretty useless at telling you what will happen in the short run. So where does this leave things for the long-term investor?

First things first, expected returns are lower across the board but things don’t actually look quite so bad. Japan and emerging markets are actually slightly cheap. UK and Europe are only slightly expensive. The US does stand apart by appearing more expensive but betting against that market has been a losing trade for years.

So, with the lack of valuation signals, a more appropriate strategy now is actually to balance your portfolio across multiple markets. Spread your risk and avoid putting all your eggs in one basket.

  • If you want to find out more you can find the full article here.

Authors

Duncan Lamont, CFA
Head of Strategic Research, Schroders

Topics

Follow us.

Please ensure you read our legal important information before visiting the rest of our website.

Issued by Schroder Investment Management (Singapore) Ltd, 138 Market Street, #23-01, CapitaGreen, Singapore 048946

For illustrative purposes only and does not constitute a recommendation to invest in the above-mentioned security / sector / country.

Schroder Investment Management (Singapore) Ltd is regulated by the Monetary Authority of Singapore. Reg. no. 199201080H

Important notice: Schroders does not make unsolicited requests through emails, calls, messages, WhatsApp, WeChat, Facebook, Instagram applications. Any contact other than via Schroders’ official channels for personal or financial information is likely to be false and fraudulent. Please stay vigilant and refer to our Fraud Alert Notice for further details. If you have doubts about the person, platforms, websites or institutions that claim to be associated with Schroders, please contact us via +65 6800 7000 and inform the local police.