Looking to take some profits? U.S. shares look relatively expensive, says Barron's
As the taper approaches, it may be time to ring the register and book some gains, Barron's thinks. Add in the fact that the S&P's 26% YTD gain has "likely [left] many investors with a higher mix of stocks than they would prefer," and the issues isn't whether or not to sell, but rather "what to sell and where to put the cash."
Food for thought from Jack Hough: "The S&P 500 trades above 17 times trailing earnings, versus a historical average of about 15 [and] U.S. shares are 57% more expensive than emerging markets and 67% more expensive than Europe" based on "a long-term average of earnings to adjust for cyclicality."
Investors might want to consider putting small companies on the chopping block first, as they have outperformed their larger cap counterparts this year and their P/E premium to large caps has stretched well beyond its historical average.
Small/Micro Cap ETFs: IWM, TZA, TNA, IWC, UWM, VB, IJR, SLY, RWJ, URTY, TWM, SCHA, RWM, SRTY, SAA, DWAS, VTWO, SBB, SDD, RSCO, JKJ, FDM, PZI, XSLV, WMCR, FYX, VIOO, EWRS, TWOK, SMLV, PXSC
Large Cap U.S. ETFs: SPY, QQQ, SH, DIA, SSO, SDS, PSQ, IVV, SPXU, UPRO, SPLV, VOO, QID, PRF, SPXS, SPXL, TQQQ, DOG, RSP, SQQQ, DXD, QLD, RWL, EPS, UDOW, SDOW, DDM, VV, SCHX, IWB, SPHB, NY, BXUB, QQEW, QQQE, JKD, VONE, EQL, TRND, ROLA, SFLA, BXUC, QQXT, EEH, ONEK, SPXH, TRSK, BXDB, PXLC, FSU, FSE, EWRI, FWDD, TNDQ, LGLV, ALTL
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