Tuesday , 6 December 2016


Expected Global Stock Market Returns Over Next 5 Years Say “Avoid Canada & U.S. “

Today, we’re going to look at updated CAPE data from Swiss consultancy firm Wellershoff & Partners Ltd to compare stock values across all major world markets and forecast returns over the next five years.

The above edited excerpts and the copy that follows, is from a posting* by Charles Lewis Sizemore, CFA (charlessizemore.com) originally entitled CAPE and Expected Returns by Country which can be seen in its original format HERE.

Most global stock values suggest solid, if not quite spectacular returns, over the next five years, as can be seen in the table below, with developed markets priced to deliver returns of about 7% per year over the next five years. This is not a “back up the truck” opportunity, but it’s not bad either, particularly given how unappealing bonds and cash are at current yields.

Developed Markets Historical Avg CAPE Macroeconomically Adjusted CAPE Current CAPE Predicted Real Return Next 5 Years Predicted Annual Real Return
Australia 17.93 16.10 15.58 40.00 6.96
Austria 25.67 11.11 10.41 65.97 10.66
Belgium 15.71 8.44 17.40 27.38 4.95
Canada 19.35 21.26 19.08 23.25 4.26
Denmark 23.00 27.94 32.88 34.00 6.02
Finland 30.94 10.13 17.13 22.24 4.09
France 20.08 13.27 15.30 56.03 9.30
Germany 18.17 19.60 18.12 24.23 4.43
Hong Kong 18.82 18.88 17.08 57.82 9.55
Ireland 14.97 16.41 23.62 (27.46) (6.21)
Italy 20.39 10.39 11.05 47.60 8.09
Japan 34.42 29.00 24.26 29.96 5.38
Netherlands 14.68 15.52 15.83 30.12 5.40
New Zealand 16.96 18.69 18.24 18.63 3.47
Singapore 21.59 14.93 16.83 39.11 6.82
Spain 16.83 8.18 9.95 41.62 7.20
Sweden 20.72 18.60 18.91 57.00 9.44
Switzerland 19.90 27.08 19.78 31.62 5.64
UK 12.78 15.37 12.93 26.10 4.74
USA 16.35 17.77 25.04 6.73 1.31
Developed Markets Avg 22.22 17.35 32.83 5.84

*http://charlessizemore.com/cape-and-expected-returns-by-country/