Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed. Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

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Is a Recession Imminent?

Definition of a Recession: The textbook definition of a recession is two quarters of negative GDP growth. Some examples of recessions in...

Showing posts with label valuation. Show all posts
Showing posts with label valuation. Show all posts

Wednesday, 4 October 2017

Emerging Parallels to the Fall of 2007 - Hallmark of a Brand New Crisis

The fall of 2017 is increasingly looking like the fall of 2007 when risky assets topped out:

Wednesday, 23 November 2016

Chart of the Week - Combined Valuation of Equities and Bonds

The chart of the Week is courtesy Seventeen Mile via Seeking Alpha and shows the combined value of stocks and bonds since 2003. Thanks to the FED engineered asset bubble the combined valuation is testing all time highs made in 2015 prior to a 15% sell off in the S and P 500. Recently bonds have endured a significant and sharp sell off. Equities are likely to follow suit.

Tuesday, 7 June 2016

Chart of the Day - Growth in the S & P 500, P/E Ratio, Earnings

The chart of the day is courtesy the SRSrocco report and is a comparison of the increase in the S and P 500 and its P/E ratio since 2011 relative to its change in earnings.  A pretty big divergence is seen with earnings growth lagging far behind. Either the earnings growth has to catch up or prices have to come down in line with the sub par earnings growth observed.


Thursday, 10 September 2015

Interesting Charts from the World of Economics and Financial Markets-2

The first two charts are from John Rubino at dollarcollapse.com that shows that the Japanese economy hasn't recovered despite the record stimulus from the Bank of Japan:
BOJ balance sheet 2015
Japan GDP Sept 2015
2) The next chart is from Ashraf  Laidi who compares the Dollar's performance during past Fed tightening cycles and suggests the #Dollar may have peaked already:
Fed Tightening Cycles & USD Performance - Fedfunds Usdx Sep 7 (Chart 1)

3) The last chart is from John Hampson at solarcycles.net that shows that the #SandP500 is in significantly over valued territory:

You can see some more interesting charts here.


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My Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.