With many uncertainties still driving market sentiment, stock evaluations are in the spotlight. The US, Europe and Emerging Markets are rated higher than individual markets' historical prices over the past 20 years, but not overly expensive (see chart below left). However, valuations vary widely across stocks, industries, companies and countries.
With the improved earnings outlook popular database (see chart below right), AllianceBernstein believes that investors who choose their investment targets carefully can still discover attractive investment opportunities. 3 In addition, AllianceBernstein forecast data shows that stocks have more attractive expected returns than bonds.
AllianceBernstein's median expected annualized return on global equities over the next five years is 6.2%, while global bonds' annualized expected return is only 1.3%*. AllianceBernstein believes that in a low-return environment, stocks will be an important allocation position for investors to achieve long-term goals.