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
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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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
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 Morningstar.co.uk