The concept of risk and reward is based on the premise that to achieve a higher expected reward on investments, you need to increase the risk you take. For instance, the risk and reward of a small-cap growth stock is higher than a Dow stock.
Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the metal.
Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., our concern is slower world economic growth will negatively impact revenue and earnings growth of American companies, pushing equity prices lower.
|Trailing 12-month EPS for Dow Jones companies (Most Recent Quarter)||$1053.20|
|Trailing 12-month Price/earnings multiple (Most Recent Quarter)|
|Dow Jones Industrial Average Dividend Yield||2.51%|
|10-year U.S. Treasury Yield||1.96%|