Home Guides & Resources chevron_right Investing Are High Valuations Sustainable? Published November 10, 2020 https://www.adviserinvestments.com/wp-content/uploads/qw1020-are-high-valuations-sustainable.mp3 Are high valuations a threat to the markets? Could they cause a downturn? EquityThe amount of money that would be returned to shareholders if a company’s assets were sold off and all its debt repaid. Research Analyst Liz Laprade looked at some current trends for stockA financial instrument giving the holder a proportion of the ownership and earnings of a company. prices in our recent webinar,* Looking Beyond the Election to the Recovery’s Future. Please enjoy the excerpt below and click here for the full webinar replay to hear more. * * * * * Liz Laprade: The FANG+ companies (Facebook, Apple, Netflix, Google and other high-profile tech leaders) have gotten a ton of attention for high valuations this year. You have Apple up 52% year to date, Amazon up 71%, Tesla up 385% [as of October 27, 2020]. But we’re seeing a ton of bifurcation in the markets right now. While some of these tech and discretionary stocksA financial instrument giving the holder a proportion of the ownership and earnings of a company. have soared to all-time highs, sectors like energy and financials are at depressed valuations. Energy is down over 50% year-to-date. There are other parts of the world where valuations are actually really attractive. I personally have always been a big fan of the small- to mid-cap international markets. There you have about 4,000 companies that fall into that category, and they tend to be highly under-followed and under-researched by the street compared to large-cap domestic stocks. For example, while there are about 47 analysts covering just Amazon alone, there’s on average only about five that cover any given small- to mid-cap international stock. A lot of the international indices are still in the red year-to-date. I think that’s a great place to be looking for unique investment opportunities. While I can’t say that high valuations will or won’t lead to a downturn, I can say that global markets are not overvalued as a whole, and many sectors and regions are fair-to-under-valued. * * * * * Click here for a replay of Looking Beyond the Election to the Recovery’s Future. Please contact us at (800) 492-6868 to learn more about comprehensive wealth management solutions. *Webinar recorded after the market closed on Wednesday, October 28, 2020. Disclaimer: This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Our statements and opinions are subject to change at any time, without notice and should be considered only as part of a diversified portfolio. Mutual funds and exchange-traded funds mentioned herein are not necessarily held in client portfolios. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. You may request a free copy of the firm’s Form ADV Part 2A, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged. Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs. © 2020 Adviser Investments, LLC. All Rights Reserved.