Are Stocks Still Cheap on a Global Basis?

Yes, according to a new report from Morgan Stanley Smith Barney’s global investment committee. “Despite the recent rally, global equities are still priced at a forward P/E ratio of 13, at the lower end of their 40-year historical range,” advises the committee’s latest monthly update (Jan 2011) for clients.

The report also notes: “The global equity dividend yield is also high, as compared with its history versus sovereign bond yields and cash (see Chart 4). As a result, we consider global equities to be attractively valued in absolute and relative terms.”

About James Picerno 894 Articles

James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers.

Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg, Dow Jones, Reuters.

Visit: The Capital Spectator

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