You will always see a lot of articles this time of year – suggesting it is a good idea to lighten up on equities going into the Summer Months, for example:
Does it work? Surprisingly – most of the time:
- CFA Institute – Dumb Alpha: Sell in May and Go Away?
This year – it might be a good idea to give this advice some consideration, given where we are in the Market Cycle:
| Z Hedge Market Valuations: | Current | Mean | Delta |
| Shiller’s 10 Year PE Ratio: | 26.39 | 19.83 | 33.05% |
| Trailing 12 Month PE Ratio: | 24.3 | 19.14 | 26.93% |
| Tobin’s Q Ratio: | 1.02 | 0.68 | 50.00% |
| Market Cap to GDP: | 116.8 | 90.00 | 29.78% |
| Morningstar’s Fair Value: | 1.01 | 0.90 | 12.85% |
| Price to Sales: | 1.86 | 1.41 | 31.70% |
| Average Overvaluation: | 30.72% |
Click the links to research further.
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