The U.S. Market: Under-, Over-, or Fairly Valued?

GLOBAL EQUITIES WEEK: We examine the valuations on two U.S. broad market ETFs for insight.

Jason Stipp 5 December, 2011 | 10:59AM

Read more on global equity investing here.

The S&P 500 has taken a beating over the past 10 years, up only 2.5% on an annualised basis (as of Nov. 28). That anaemic return came with incredible ups and downs, while safer bonds offered a 5.7% return with less volatility over the same period.

But at this point, the outlook for U.S. stocks has improved. Now, in late November, the S&P 500 is trading at the same level it hit in late 1998. Yet the underlying companies have grown considerably over the trailing decade. Profits in 2011 are expected to reach levels not achieved since before the crisis. And the dividend yield on the S&P 500 is higher than the yield on 10-year U.S. Treasury bonds, a rare occurrence that bodes well for stocks.

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.

About Author

Jason Stipp  is Editor of Morningstar.com, the sister site of Morningstar.co.uk.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies