At the 2nd annual Evidence-Based Investing Conference earlier this month, AQR’s Cliff Asness shared his view that the expensive financial markets will offer weaker returns going forward. This according to a recent CNBC article.
According to the article, Asness predicts that investors with a “balanced portfolio of stocks and bonds will only generate 2 percent real annual returns,” but warned against betting against the market. He argues that strong evidence exists indicating that high CAPE (cyclically adjusted price-earnings) ratios will translate into lower returns for the next ten years.
“Don’t market time with this,” Asness said, adding, “Valuation of markets is a disastrous timing tool and a super weak strategy.”
