J. Siegel, a professor of the Wharton University, believes the current valuation of the US stock market are reasonable - for AMarkets materials.
The expert is convinced that the Fed is likely to raise rates before the end of the year. Current index P / E close to 18. This corresponds to a yield of 5.5% in average for the market. When the key rate at 1.5% for 10-year Treasuries yield such a digestible, the professor believes. As reasons for the low cost of money expert calls the lack of demand for capital on the part of companies that do not see the new breakthrough technologies that could become a new object of investment. Investors, in fact, consider the action as a source of current income.
Marc Faber argues with Segal, considering that the song is sung by US stocks. The reverse side of this phenomenon - the company did not provide a new fundamental value. As a result, not committed "real shopping" and a key driver of asset growth is a massive return of capital to investors in the form of dividends and share repurchases, as well as the consolidation of companies through mergers and acquisitions. In the long run, all this is fraught with a massive correction.