“Each December we publish a list of investment themes that we feel are critical to the coming year.
We continue to believe that US equities are in the midst of a major bull market that could ultimately rival 1982’s bull market.
It is hard to be bearish when one considers the following:
Sentiment — Continued outflows from US equity funds; Wall Street Strategists’ recommending the most bearish equity asset allocation in nearly 30 years.
Valuation – According to our models, the US equity market is presently discounting 5%-6% inflation for the next 12 months, which seems very extreme to us.
Liquidity – The Fed has told investors that they will continue to provide liquidity and will be slow or late to tighten.
With that bullish view toward equities, here are our “13 for ’13.”
1) US stocks outperform Emerging Markets, yet again.
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