Value and Risk Define Equity Markets
As we head into 2013 we hold a tempered optimism for stocks. By many historical and relative measures stocks appear to be a great value, but the attractiveness of that value is offset by highly visible economic risks.
Facing a potential meltdown in Europe, slowing growth in China, and a large and growing budget deficit at home, the S&P 500 managed to return 16.00% to investors in 2012. Despite facing significant headwinds, the market would close every day last year above the close of the previous year, something that has happened only eight times in the history of the market.