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By Karsten Løngaard, Regional Director, Sparinvest
At times like this, one can read articles on how expensive the stock market is. Even comparisons with 1929 and 2007 are made which, however, seems a bit farfetched. Sparinvest’s best “guess” is that stocks over the course of the next 10 years will return 6-7% annually – which is not bad considering low and stable inflation and bearing in mind what risk return characteristics other asset classes put on the table. Hence, if investors want to achieve better returns than suggested above, then like when buying a car, investors should look under the bonnet – which arguably is a healthy thing to do in the long run.
MSCI World trades at 22 times earnings, which is at the upper end of the historical...
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