Ever since the start of the Great Recession, central nanks around the world have been pushing interest rates lower through a combination of rate decisions and monetary easing. By 2016, Japan and several European countries - including Austria, Denmark, Germany, the Netherlands, and Switzerland - have dropped short-term policy rates into negative territory. With lower policy rates comes greater interest among investors to seek higher-yielding investments - typically, stocks.
Unfortunately, after an eight-year recovery, opportunities in stocks at reasonable valuations are slim pickings. A recent study from Goldman Sachs shows median stock valuations at 99th percentile, relative to prices going back to 1976.
For investors who maintain a broadly diversified portfolio without attempts at stock-picking and market timing, this is essentially a non-issue. However, it's important to understand that stocks do reach levels where they may be considered "priced for perfection." In other words, there's a point at which it's… Read More …
