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Investing Newsletter – January 2018
  • 2017 was an exceptional year for globally diversified investors.

  • The US Shiller CAPE 10 year PE ratio is reaching historic levels indicating that the US stock market may be overvalued.

  • Vanguard’s US fair-value CAPE measurement that adjusts for inflation and interest rates indicates a less overvalued US market.

  • International Developed and Emerging Market Shiller CAPE 10 year PE ratios are less elevated which may indicate higher future long term returns for these markets versus US markets.

  • Valuation measurements such as the Shiller CAPE 10 PE ratio tell us nothing about when to expect the next market correction or bear market.

  • Rational investors should expect lower returns in the foreseeable future.

  • After significant gains in 2017, investors should consider rebalancing their portfolios especially if they are concerned about elevated stock market valuations.

Investing Newsletter - Jan 2018

Market Review – Q4 2017
  • Looking at broad market indices, emerging markets outperformed US and non-US developed markets during the quarter.
  • Small caps outperformed large caps in non-US developed markets and emerging markets but underperformed in the US.
  • The Bloomberg Commodity Index Total Return gained 4.71% in the fourth quarter, bringing the 2017 total annual return to 1.70%.
  • Article: What Should Investors Make of Bitcoin (cryptocurrency) Mania?

Download Market Review Q4

Market Review – Q3 2017
  • Emerging markets outperformed developed markets, including the US, during the quarter.
  • In US dollar terms, developed markets outperformed US equity indices but underperformed emerging markets indices during the quarter.
  • The Bloomberg Commodity Index Total Return gained 2.52% during the third quarter.
  • Interest rates increased slightly across the US fixed income market for the quarter, but total returns still remained positive for most investment grade indices.

Market Review Q3 2017