Equities remain cheap on a relative basis

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Livewire Markets

Miles Staude, Portfolio Manager of The Global Value Fund, keeps a track of what he calls ‘2nd page stories’. He says it helps him think about scenarios that could have important implications but might not be fully priced into markets. One story that stands out in his current list is that he believes equity markets still look cheap. Staude says, “It’s a relative call. It’s a quirk of the market that we all look at things on a price to earnings basis… What you need to consider when you think about asset classes being cheap against one another is how they look compared to global yields and primarily bonds. Right now the extra yield you get for investing in equities relative to bonds is the highest it has been in decades… It doesn’t mean equities need to go up. However, I take a lot of comfort owning something that, in a relative sense, is much cheaper than the other assets I could own.” Watch the full interview here:


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