Though the news stream is full of discussions as to how the United States presidential election could impact the stock market, many strategists argue that investors are better off focusing elsewhere. In an article published in Forbes, Managing Director Harold Pine explains that it’s far more important for investors to focus on asset valuations.
Currently, valuation is, at just above 26, the third-highest in history – the only higher valuations were recorded in 1929 and 2000. Mr. Pine advises investors to examine their allocation to risk assets, and to see if that makes sense based on valuations and asset volatility.
Mr. Pine concludes the article by advising investors to be patient and focus on the quantitative aspects of the stock market, rather than political rhetoric. “Trying to time when valuations will normalize is a difficult endeavor,” Mr. Pine writes. “I’d rather be early and patient than late and poorer.”