What’s Next for the Stock Market?
The market ructions in early February were a genuine ‘shot-across-the-bows’ – a warning to investors about the longevity of easy credit, soaring asset prices and ultra-low volatility. That’s why, with markets potentially on the verge of a big reversal, we think it’s prudent to hold more cash.
 The S&P500 TR Index rose 26.46% in 2009, 15.06% in 2010, 2.11% in 2011, 16% in 2012, 32.39% in 2013, 13.69% in 2014, 1.38% in 2015, 11.96% in 2016 and 21.83% in 2017.
 Dropping the negative earnings of 2008 from the CAPE ratio and adding 10% growth to the earnings number for 2018, has the CAPE ratio still at over 30 times and above all levels ever with the exception of the dotcom boom.
 The Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk.