Biggest Risk Looming: Upside Risk

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Since 1999, earnings for S&P 500 companies have grown more than 200% while the price level is now only 60% higher.

We have seen this movie before. No, it is not Friday the 13th coincidentally happening in two weeks. It is the overwhelming fear that any day this stock market is going to implode, which is exactly what investors have been bracing for – for the last decade. Who can blame them? The simple fact is that the economic statistics globally are gaining speed. Currently - not limited to the U.S. - we are in an economic backdrop of accelerating corporate earnings, broadening manufacturing, strengthening consumer and a pro-business U.S Administration. Meanwhile, U.S. stocks (S&P 500) are up over 11%; MSCI EAFE over 17% and MSCI Emerging Markets over 27% which should be more enticing than the near zero percent return from being in cash-like securities. Most investors don’t realize that these stellar returns are considered risk too but categorized as “upside risk”. Please see page 6 of the Voya Global Perspectives™ Book showing 2017 expected earnings to reach all time record highs.

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