Which Stock Market Offers Best Value in 2018?

Value-driven investors Morningstar Investment Management reveal the geographies they believe offer the greatest gains over the next 10 years

Dan Kemp 3 January, 2018 | 1:24PM

Asset allocation convictions are necessary to shape and build portfolios, but investors must be aware of the behavioural biases that underpin predictions and ultimately endanger outcomes. We must therefore preface our own thoughts with an explicit statement that market predictions are an investor’s folly.

Instead of making brash comments about the short-term, we prefer to outline our best long-term thinking, which is that the investment landscape is generally expensive according to our methodology and logic.

Is the Current Market Expensive?

When considering the valuation landscape, we first think about the valuation-implied returns an investor could reasonably expect, over 10-years, and the evolution of these expectations over time. Feeding these outputs are a series of fundamental inputs, including dividends, return-on-equity, valuation multiples, profit margins and a reasonable expectation for long-term earnings growth.

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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.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BT Group PLC117.08 GBX5.19
Vodafone Group PLC116.56 GBX4.99

About Author

Dan Kemp

Dan Kemp  is Chief Investment Officer, Morningstar Investment Management EMEA

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