A big question in everyone’s mind, as the event unfolds, should be “how will the stock market react to the new administration?”
Yesterday I sent Purposeful Investing Course subscribers the answer to this question in a 79 page Keppler Asset Management Quarterly Developed Market Report.
This is a huge amount of information based on studies of every developed stock market around the world. I doubt there are few sources of information that contain so much market data at one time.
I also stressed several important points that helped subscribers understand the answer to this four year stock market question.
First point: Keppler’s Total Return Projections, made since 1994, have been very accurate.
The chart below shows the entire real-time forecasting history for the KAM Equally Weighted World Index, starting at the end of 1993.
This last quarter the actual KAM Equally Weighted World Index is only 3.4% below the intrinsic value that Keppler forecast in December 2016.
Second Point: Keppler now projects a much lower return for all developed markets over the next three to five years.
This drop in projected results has little to do with politics, economies, world trade or any of that guesswork.
It’s all about the value!
Due to such a sharp rise in each major market last quarter, the projection for every national, index or strategy return projection is now down by several percentage points compared to the September 2020 projection quarter-end last year. The markets shot up so fast they simply are not such good value now.
The current (December 31, 2020) projection is that the KAM Equally Weighted World Index will see a compound annual total return estimate of 2.6% in local currencies. That projection is way down from the projection of 6.1% just three months ago.
The upper-band estimate implies a compound annual total return of 7.4% (down from 11.1% three months ago), while the lower-band estimate of indicates a compound annual total return of minus 3.0% (down from positive 0.4% last quarter).
In other words global markets overheated, soared too high and we won’t see significant growth in the 3 to 5 years ahead.
Third point: The US market will see the worst results of all the major markets into 2024.
Keppler’s projections show negative 3-5 year total returns for the MSCI USA Index for the first time since 2000.
Fourth Point: The Top Value Markets will do best, Asia and Europe will be the best developed markets from now to 2024.
World growth will be stunted by the low US results. Asia and Europe will catch up with the terrific results the US market enjoyed over the past 5 years.
The average developed market—as measured by the KAM Equally Weighted World Index—is now under-valued by 29% vs. the cap-weighted MSCI World Index, based on traditional valuation measures..
The Top Value Markets are now undervalued by 39% compared to the MSCI World (Standard) Index and are undervalued 51% compared to the MSCI USA Index.
This summary suggests that the next four years will see lower results in stock markets, especially the USA.
This fact is important to keep an eye on in case there is a significant correction. If so this will be a good time to add to the Pifolio.
Learn how to create your own Top Value Portfolio (we call it a Pifolio).
Last week I sent a five year performance review showing that the Pifolio saw steady growth and good income (9.4% per annum) over that period.
The review shows that the Pifolio has been safe.
Perhaps the biggest benefit has been the ease. There have been no advantages to viewing this portfolio daily or even weekly. A monthly checkup has been more than enough to keep the portfolio balanced. There have been only a handful of changes in the Top Value market over the past five years. This strategy of easy, long term investing stops us from getting daily jitters and most important, frees up time so we can enjoy life.
The three benefits of the Pifolio are; safety, maximum profit potential and more time to live.
Here’s how you can create your own good value strategy.
I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use. You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.
You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years. Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.
You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets). This analysis looks at the price to book, price to earnings, average yield and much more of all 46 markets.
This year I will celebrate my 53rd anniversary of global investing and writing about global investing. Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades. This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in the Pi course.
Subscribe to the first year of The Personal investing Course (Pi). The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $124.50 off the subscription.
Enroll in Pi. Get the basic training, the 46 market value report and access to all the updates of the past two years, plus all new updates over the next year.
I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.
If you are not totally happy, simply let me know in the first two months for a full, no fuss full refund.
You have nothing to lose except the fear. You gain the ultimate form of financial security as you reduce risk and increase profit potential.
Due to the COVID-19 pandemic we have cut the subscription to $174.50. You save $124.50!
Then because this global recovery from the pandemic is going to take years, we’ll maintain your subscription at just $99 a year rather than $299. Your subscription will be autorenewed in 2022 at $99, though you can cancel at any time.
Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.