Review and Outlook: Red Light! Green Light! Yellow Light?
Overview
This perspective from the Glenmede CIO discusses asset returns and the business cycle, trends in economic growth and a review of valuations, business cycles and asset returns. Investors gauge how to proceed based on short-term indicators and valuation signals similar to the game "Red Light, Green Light". For the past five years, strong economic fundamentals, healthy pricing momentum, earnings trends and moderate valuation levels have amounted to a flashing green light. Recently, however, these indicators have weakened, and while the leader is not yet shouting “red light,” a cautioning yellow signal is flashing.