Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

All-round Multi-Asset investor. Former head of a EUR 5 billion multi-asset fund range. Speaker. Charts & Frameworks. Founder of True Insights, a provider of independent investment research, trade ideas & well-diversified portfolios.
https://true-insights.net/

Global Multi-Asset Investment Strategist

TINA Has Left, Bond Yields Shine, and Cash Is King!

Weekly Market Monitor Week 8 - Sticky Inflation, Moving Average Anxiety, and the Bond Yield Issue

Equity Market Complacency? Why the VIX Index Is Trading Below 20

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Cross Asset Strategy

<ul>
<li>The last time the 2-year US Treasury yield was at the current level, the S&amp;P 500 Index (<a href="https://www.smartkarma.com/entities/spdr-s-p-500-etf-trust" target="_blank" data-smartkarma-citation="entities:763:1" rel="noopener">SPDR S&amp;P 500 (SPY US))</a>  was trading at just below 3,800.</li>
<li>But even then, the P/E ratio of US equities was too high relative to short-term interest rates.</li>
<li>The S&amp;P 500 Index P/E ratio would have to fall to 17.4 from the current 19.1 to realign with bond yields, proving nearly 10% downside. Stay short.</li>
</ul>


The last time the 2-year US Treasury yield was at the current level, the S&amp;P 500 Index (SPDR S&amp;P 500 (SPY US))  was trading at just below 3,800.
But even then, the P/E ratio of US equities was too high relative to short-term interest rates.
The S&amp;P 500 Index P/E ratio would have to fall to 17.4 from the current 19.1 to realign with bond yields, proving nearly 10% downside. Stay short.


Yields Up? Add Another 10% Downside for Stocks!