Try Japan, China as U.S. Stocks Too Pricey Says Markets Strategist

The market is not just in record territory, it's in 'expensive territory,' said Casey Clark, vice president of investment strategy at Glenmede Trust Company. 'As we enter the late stages of the economic expansion, return prospects are below average and the propensity for volatility is high,' said Clark. 'Still, we don't think that investors should abandon U.S. stocks. We are recommending a neutral weight to U.S. equities with a bias toward high quality and defensive strategies.' That said, Clark does not see bonds as much of a bargain either. 'With central banks pushing yields lower, we recommend for investors to underweight fixed income and, for those who can accept greater levels of risk, invest in targeted high yield opportunities,' said Clark. Seeing both U.S. equities and bonds too pricey and volatile, Clark said investors should consider looking abroad for opportunities, specifically Japan where Prime Minister Shinzo Abe ordered a new round of fiscal stimulus spending after an impressive election victory last week. 'We expect Japan to enhance fiscal and monetary support in the coming months to combat Yen appreciation and low inflation expectations,' said Clark.