Equity investors point to the dizzying heights
of price-to-earnings multiples as reason to fear
the market is dangerously overvalued, something that
shows the PE multiples are terrible buy and sell
signals. Rather, investors should be concerned
that 2018 will see a reckoning in the reliance on
dividend valuation, a somewhat better indicator in times
of high expectation.
A jump in bond yields will
remove the ‘bond proxy’ trade that has seen
investors jump into reliable dividend payers.
The companies that have unsustainably raised their
dividends to try and muscle in on the action will
be among the first affected.It is however
expected that 2018 will be the focus
of the Trump administration , on things pertaining to
economic. Thus equities will continue to
grow during this period as Trump Heads for
2020 mid term elections.