In this series, we started off by examining the returns in 2006 through various asset categories. The asset categories included REITs, small caps, mid caps, large caps, foreign stocks and commodities. We then analyzed the P/E and valuations of different asset categories. We found REITs to be overpriced and we also found the outlook for commodities a bit weaker going into the new year. In the other asset categories, we found many asset categories to be richly valued because of the broad bull market in the second half of 2006.
Our analysis didnt include individual stocks. Despite the broad bull market, it is possible to find a few companies trading below intrinsic value. Such a find requires careful study and deep analysis. We will be analyzing some companies individually in this blog from time to time.
The analysis of the macro economic trends indicates a strong year for the emerging markets and a decent year for the developed economies especially the ones in the Euro zone. All in all, the future looks bright with a few road bumps along the way.
We conclude this series of investing in 2007 by wishing the readers a happy holiday season and a prosperous investing new year.