It may not be my money, but it is my job. — Charles Ellis in Investment Policy: How to Win the Loser's Game
Forward P/E ratios are a bit of a joke. Why? Because Wall Street analysts overestimate prospective earnings 80% of the time. Chart 1 shows only six years since 1984 with conservative forecasts, offering objective proof – as if needed – that Wall Street is not your friend.
Templeton Emerging Markets Group has a wide investment universe to cover—tens of thousands of companies in markets on nearly every continent! While we are bottom-up investors, we also take into account big-picture context.
U.S. stocks have been consolidating gains seen in the aftermath of the November presidential election, a healthy process following such strong gains. Further appreciation should be supported by improving U.S. and global economic and earnings growth. Disappointments are likely on the U.S. policy front but we would view those as buying opportunities for now.
There are several irrefutable facts that should be informing the strategies for leaders in financial services.
While it’s well-known that the DOL’s fiduciary ruling requires all financial advisors to put their clients’ interests first, financial services professionals are still unable to know how broad of an impact the ruling will have on other aspects of their practice, including marketing.
In just a few decades, Vietnam has undergone a dramatic transformation, from an agrarian society to one that has embraced the modern era. Its youthful population and growing middle class have helped drive solid growth—and opportunities for many global investors.
The policy backdrop in the US will be particularly favorable for the economy, with looser fiscal policy, relatively easy monetary policy and a less stringent regulatory environment. Their eight-year US preeminence theme is intact and continues into its ninth year. While President-elect Trump’s initial policy measures with respect to tariffs and trade agreements risk jolting financial markets, he will likely adjust and change course as necessary to achieve his desired results.
The global economy is going through significant change, as Donald Trump’s incoming administration and shifts in public sentiment in other major economies create potential for new opportunities and risks.
We have used the metaphor of the "Plow Horse" to define the US economy since 2009 – an economy driven by new technology and entrepreneurship (fracking, the cloud, smartphones, big data...), but held back by the friction of a growing and burdensome government.