10 years into the recovery, and with valuations close to or at historical highs, there’s little denying that we’re getting late in the cycle. However, Amit Lodha, Portfolio Manager at the Fidelity Global Equities Fund, says that valuations are only half the story.
- Valuations are never a catalyst – markets don’t correct because valuations are high.
- The margin of safety is low when investing at this point in the cycle.
- On a relative basis, equities look more attractive than fixed income.
- The structure of equity markets has changed. The biggest companies in the world are all asset-light tech firms, and our traditional market valuation methods might not fully account for this.
- Watch the full video to hear how equity investors can prepare for potential turbulence ahead.