On simple Price-Earnings metrics the share market is slightly above long term trend

On simple Price-Earnings metrics the share market is slightly above long term trend. Credit Suisse analysis shows the market is currently trading about one standard deviation above its long term average. This is just the plain vanilla observation and probably giving investors the wrong message. The correct view is that at this point of the share market cycle, when earnings growth follows re-rating, the present slight over-valuation is perfectly normal and in tune with past experiences. The latest update by strategists at Macquarie provides further support to the view that Australian equities are no longer cheap, but they remain poised to post another positive performance this year. On Macquarie's updated calculations the ASX200 will narrowly miss the 6000 level by year-end, for a total investment return of nearly 17%. This is less than the 20.2% achieved in 2013, but a whole lot better than the negative outlooks from the scarecrows.