From the September 2005 issue of Investment Advisor • Subscribe!

September 1, 2005

Behind the Numbers, with lincoln anderson

the most bullish on equities of all our panelists for what seems to him the most obvious of reasons. "In terms of relative valuations the stock market looks cheap to me and the bond market looks rich." He notes that with the P/E ratio on the S&P 500 hovering around 16, the earning yield on equities should be much better than on a 10-year Treasury note. Within the equity sector though, Anderson thinks it's time for a change in emphasis. "It just seems like the valuations are getting stretched enough that it makes sense to be tilting away from small caps toward large caps and away from value toward growth," he says.--Robert F. Keane
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