Although global equities have seen an incredibly strong run higher the last few months, things may be cooling off over the next few months. The market resides near all-time highs and just below record highs on some of my proprietary indicators. While my bullishness is measured, there are a number of markets that still look extremely attractive on a relative basis, warranting investment consideration right now.
The chart below looks at global equities relative to the U.S. 10-Y bond. A proxy for this indicator is Vanguard Total World Stock ETF (VT) over iShares 7-10 Year Treasury Bond (IEF). As can be seen, this indicator peaked in late-2007, and is still a decent way from recapturing such highs. The benefit of this indicator is that it accounts for the true strength of global equities. Low interest rates worldwide the past few years pushed both stock and bond prices higher.
Looking at…
