Imagine it’s 1912, and you find yourself on the Titanic’s maiden voyage. You know that the ship is going to sink, but you’re sketchy on when it’s going to happen. What should you do? This scenario is similar to the current predicament for investors where almost all asset classes are expensive when using standard valuation techniques. The answer for both situations is the same; you should spend your time loitering around the lifeboats.
The Current Environment
In recent months many have called out the predicament faced by investors. Global price/earnings ratios for stocks are high, and the quality of earnings used in those ratios is questionable. Credit spreads are low for both investment grade and high yield debt in pretty much...
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