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From Seeking Alpha Beware! IWM Small caps get even pricier "We start to get a little queasy when we hit 19x," says BAML's Steven DeSanctis, unable to find bargains in any sector of the small cap universe.The Russell 2000 is up 29% this year, and 5.4% over the three months, easily cruising past the S&P 500's 21% and 2.7% gains, but the small cap's P/E ratio has risen to just over 18 vs. a long-term average of 14.9.The lofty valuation has BAML recommending clients swap out of U.S. growth for global growth as small caps generally have less exposure to international action.Small cap ETFs: IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK, IWO, VTWG, UKK, SKK, IWN, VTWV, UVT, SJH.
Comments
Regards,
Ted
IWM
Small caps get even pricier
"We start to get a little queasy when we hit 19x," says BAML's Steven DeSanctis, unable to find bargains in any sector of the small cap universe.The Russell 2000 is up 29% this year, and 5.4% over the three months, easily cruising past the S&P 500's 21% and 2.7% gains, but the small cap's P/E ratio has risen to just over 18 vs. a long-term average of 14.9.The lofty valuation has BAML recommending clients swap out of U.S. growth for global growth as small caps generally have less exposure to international action.Small cap ETFs: IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK, IWO, VTWG, UKK, SKK, IWN, VTWV, UVT, SJH.
Regards,
Ted
Scott MInard/Guggenheim
With the partial government shutdown and Washington gridlock behind us for now, interest rates should continue declining and conditions are pointing to a period of renewed strength across asset classes.
http://guggenheimpartners.com/perspectives/macroview/headwinds-give-way-to-bullishness