Expected Global Stock Market Returns Over Next 5 Years Say “Avoid Canada & U.S. ” (+2K Views)

Lorimer Wilson June 17, 2015 Comments Off on Expected Global Stock Market Returns Over Next 5 Years Say “Avoid Canada & U.S. ” (+2K Views) 2,765 Views

Today, we’re going to look at updated CAPE data from Swiss consultancy firm Wellershoff & Partners Ltd to compare stock values across all major world markets and forecast returns over the next five years.

The above edited excerpts and the copy that follows, is from a posting* by Charles Lewis Sizemore, CFA (charlessizemore.com) originally entitled CAPE and Expected Returns by Country which can be seen in its original format HERE.

Most global stock values suggest solid, if not quite spectacular returns, over the next five years, as can be seen in the table below, with developed markets priced to deliver returns of about 7% per year over the next five years. This is not a “back up the truck” opportunity, but it’s not bad either, particularly given how unappealing bonds and cash are at current yields.

Developed Markets	Historical Avg CAPE	Macroeconomically Adjusted CAPE	Current CAPE	Predicted Real Return Next 5 Years	Predicted Annual Real Return
Australia	17.93	16.10	15.58	40.00	6.96
Austria	25.67	11.11	10.41	65.97	10.66
Belgium	15.71	8.44	17.40	27.38	4.95
Canada	19.35	21.26	19.08	23.25	4.26
Denmark	23.00	27.94	32.88	34.00	6.02
Finland	30.94	10.13	17.13	22.24	4.09
France	20.08	13.27	15.30	56.03	9.30
Germany	18.17	19.60	18.12	24.23	4.43
Hong Kong	18.82	18.88	17.08	57.82	9.55
Ireland	14.97	16.41	23.62	(27.46)	(6.21)
Italy	20.39	10.39	11.05	47.60	8.09
Japan	34.42	29.00	24.26	29.96	5.38
Netherlands	14.68	15.52	15.83	30.12	5.40
New Zealand	16.96	18.69	18.24	18.63	3.47
Singapore	21.59	14.93	16.83	39.11	6.82
Spain	16.83	8.18	9.95	41.62	7.20
Sweden	20.72	18.60	18.91	57.00	9.44
Switzerland	19.90	27.08	19.78	31.62	5.64
UK	12.78	15.37	12.93	26.10	4.74
USA	16.35	17.77	25.04	6.73	1.31
Developed Markets Avg	22.22		17.35	32.83	5.84

*http://charlessizemore.com/cape-and-expected-returns-by-country/