I have been fairly cautious in my U.S. equity outlook in these pages, but that doesn’t mean I am equity bearish. The accompanying chart shows the progress of different major regional stock markets priced in USD in the last 20 years. With the exception of China, whose stock market doesn’t reflect its economy, stock prices have risen in various degrees over that time period.
The top panel of the chart shows that S&P 500 has handily beaten global markets since the GFC and it has retreated back to the rising trend line. Conventional technical analysis calls for investors to buy the dip, with a stop loss just below the trend line. I argue for the Sell America trade of minimizing exposure to USD assets in a broadly diversified portfolio.
The full post can be found here.
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