Are you worried that stock market valuation has gone. Too far ahead of economic and business fundamentals? Or you are thinking too much about that the great bull market is long past its sell-by date? You must know that we are actually in a structural expansion of economic activity, profits, and employment. That probably has many more years to run according to the economists.
It would be not wrong to say that the economic conditions are strong worldwide, with the U.S., Europe, and China. All enjoying simultaneously robust growth for the first time since 2008. As inflation appears to be in check. Central bankers are likely to continue erring on the side of stimulative loose money policies. Thus, current stock valuations are attractive with very low-interest rates. Given that they imply future real returns of about 4% to 5% per annum.
It was reported that the U.S. GDP grew at a 3.3% annualized rate in the third quarter, per the Bureau of Economic Analysis in the U.S. Department of Commerce. Due to this, there wasn’t solely beat an accord forecast of two.5%. From economists polled by Reuters but also U.S. GDP growth has now accelerated in each successive quarter of 2017.
Many of you’re disturbed that, once the financial stimulant called quantitative easing was withdrawn. By the Federal Reserve and other central banks around the world. The economy would fall into recession, and stock prices would plummet. But, you need to learn that the Fed halted its QE-driven bond purchases in 2014. That began raising interest rates in 2015, yet the economy continued to grow. On the other hand asset prices subsequently zoomed into new record territory.