Don't Get Spooked by Expensive US Stocks, says JP Morgan

The S&P 500 has risen 4.7% this year and the market looks expensive – but JP Morgan says there are greater gains to be had

Karen Kwok 11 April, 2017 | 3:53PM
Facebook Twitter LinkedIn

US stocks are no longer cheap – but there are reasons for the market rally to continue over the next 12 months, according to JP Morgan.

Donald Trump’s presidential election victory caused a minor blip in markets in November – but one day later the S&P 500 resumed its climb, continuing its near eight-year rally. The price to earnings ratio of the US now is at 17.7x against a 26-year average of 15.7x for the S&P 500. Many investors are using this figure to conclude that the market is overpriced and due a correction.  

Every new market across the pond raises speculation on how long this rally will last and when the best time to take profits is after such a considerable bull market. But according to David Stubbs, global market strategist at JP Morgan Asset Management, there are reasons for investors to stay invested.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Brown Advisory US Equity Growth $ A56.55 USD0.25Rating
Heptagon Yacktman US Equity C USD Acc330.22 USD0.49Rating
Vanguard U.S. Eq Idx £ Inc629.31 GBP-0.11Rating

About Author

Karen Kwok

Karen Kwok  is a Reporter for