Many advisory firms talk about their array of tools and resources. Every firm that is worth talking to
has them. The difference, however, is what the advisor does with them. Do they have the insight to use
them properly? How well do they apply them to help you? ACG’s insights may help provide a sense of
our ability to help you achieve success, as you define that term.
“Most kitchens have the same spices in the spice rack. That does not mean everyone is a good cook.”
– anonymous
Five years ago in financial economic history, the situation was a lot like today.
The stock market was fully valued by traditional measures, making stocks more susceptible to a correction, but the economy was accelerating.
Five years ago, the stock market looked risky. Stocks had gained 77% in 2012, 2013 and 2014, before taking a breather in 2015 and 2016.
Stock valuations had climbed sharply from their lows in The Great Recession. In that period, the market’s price-to-earnings ratio rose from way undervalued — trading at 12 times 12-month trailing earnings — to flirt with overvaluation, at 18.2 as of mid- June 2016.
How did things turn out?
On June 24, 2016, England voted to “Brexit” from the European Union, and the stock market plunged 5.3% but rebounded within a few days.
The current financial economic outlook is quite bright but stock valuations are high by traditional price-earnings benchmarks.
Past performance is not a guarantee of what will happen in the future but in the last five years the S&P 500 total return index more than doubled in value.
As fraught as these times may seem, five years ago in financial economic history the situation for investors was a lot like today.
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