Invesco: Hiding in plain sight...

The European Equities team look at the widening disparity of valuations within the European market and how this impacts risk within portfolios.

We have been flagging the widening disparity of valuation within the market for some time. While we are less worried about overall market valuations, we believe aggregate multiples are masking a huge skew within the market and that skew is itself a risk.

David Bowers, ASR’s strategist recently wrote:

“It is not the risky calls that damage portfolios the most – if you know something is risky you can plan accordingly. What causes the greatest damage is something you assume to be safe that turns out to be nothing of the sort.”

Download the PDF to read more about:

• The valuation skews present in equity markets today and the dangers they pose to unaware investors.
• The (unintended) effects and consequences of loose monetary policy.
• What could change going forward?
• How are we positioning our portfolios today?

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.