Doug Ramsey, the chief investment officer at The Leuthold Group, points out an inconspicuous market event that coincided with new all-time highs for stocks.
"Those with true multi-generational wealth should probably have little or no exposure to a market trading at nearly 30x Normalized EPS," he said.In late August, as stocks were carving out fresh all-time highs, many investors were cheering the market's resiliency. After all, it's not every day that equities recover from a 30 percent-plus, global pandemic-induced, fastest-ever bear market with a vengeance.
Ramsey provided the following chart to provide visual context for his finding. Amid years of precipitous drops, the yield on a traditional 60/40 portfolio is the lowest it's ever been.To Ramsey, that's cause for concern — and his argument is rather straightforward. Allow him to explain. Considering that stocks are trading on the loftier side of historical valuations, Ramsey thinks investors may want to think twice before diving into the fray with both feet.
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