After a couple weeks of uncertainty, stocks have pushed ahead. They again show a clear advantage over bonds. Looking at the economy, interest rates and inflation remain subdued, which is generally supportive of economic growth. These are the conditions that help generate profits in business.
In turning my attention to the various asset classes in my rotation model, European stocks (XIN) maintain the lead. That pleases me, since I’ve owned it since February 1st. In the ensuing three months, it has risen in value almost 10%. By contrast, the TSX has fallen almost 2%. American stocks (SPY, IWM) also look attractive, followed by Hong Kong stocks (EWH).
The TSX group (Standard & Poors, a division of McGraw-Hill) has changed their website AGAIN, and no longer shows the average P/E of the TSX index. The result is that I haven’t yet found a way to calculate a fair market value. It was nice to see, but it didn’t inform my investment decisions anyway.