Equity UpdateWhile the S&P 500 got off to a robust start in the first five months of 2013, many investors remember the period following the previous highs were not too favorable for equity investors, so the natural question is whether it is time to reduce an overweight position in equities. “Our answer is no, since we believe equities could see an additional 5% to 7% o the upside in 2013,” Carnal said. “Even with strong gains this year, the valuation levels for the market remain reasonable with the S&P 500 Price/Operating Earnings Ratio at 16.6 times earnings and only 0.5 above the 50-year average of 16.1 times. Given the low level of interest rates, we could see the multiple expand 18 times. Reported earnings for the remainder of the year will accelerate and should surpass 10% growth versus 2012.”
The Commerce Trust Company Releases Its Mid-year Outlook
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