By Steve Blumenthal, CEO, CMG Capital Management Group
Valuation confusion is common in our business. Especially to the engineer, schoolteacher, doctor, business owner and pretty much everyone else (your client) who loves what they do yet looks at the market with sometimes dispassionate interest.
To sort through the confusion on valuation, I think Doug Short, Vice President of Research at Advisor Perspectives, did a great job of explaining where we are today (expensive stock market) and how investors should think about Price-to-Earnings valuation metrics.
The simple takeaway today is the market is expensively priced.
If buying investments when they are on sale vs. buying them when their prices are inflated can increase returns then we should view these valuation states differently.