U.S. stock prices are now markedly overvalued, warns investment firm PIMCO. They significantly exceed the value of government bonds - in fact, by the maximum amount in history. Such a method as comparison with government debt securities is traditionally used to determine the fairness of stock valuation and has shown its effectiveness, reports profinance.ru.
The value of U.S. stocks has rarely risen above trejeris - there are few such cases, say the company's portfolio managers. This was the case, for example, during the dot-com crash and the Great Depression. However, as history shows, it is unlikely that stocks will continue to be significantly more expensive than government bonds. GAM Asset Management also points to the overvaluation of stocks.
The risk premium on them has fallen to the lowest level in the history of observation, and this weakens investor interest in them - trejeris against their background are beginning to look more favorable instrument, says Julian Howard, chief investment director of the company.