View Sample PDF - RBC Direct Investing

Global Investment Outlook • Eric Lascelles • Daniel E. Chornous, CFA • John Richards
Global EQUITY MARKET Valuations
X
X
X
35
30
25
20
15
10
5
0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Source: RBC GAM
120
100
80
60
40
20
0
30
25
20
15
10
S&P 500 Index
Normalized (Equilibrium) Price/Earnings Ratio
Jun. '12 Range: 1 Std. Dev.: 12.6x - 20.4x (Mid: 16.5x)
Jun. '12 Range: 2 Std. Dev.: 8.7x - 24.2x (Mid: 16.5x)
Current: 13.2x
P/E on Trailing 12 Months Earnings
+/- 1 Standard Deviation from Equilibrium P/E
+/- 2 Standard Deviations from Equilibrium P/E
Japan Datastream Index
Normalized (Equilibrium) Price/Earnings Ratio
Jun. '12 Range: 1 Std. Dev.: 11.3x - 22.9x (Mid: 17.1x)
Jun. '12 Range: 2 Std. Dev.: 5.6x - 28.7x (Mid: 17.1x)
Current: 13.0x
P/E on Trailing 12 Months Earnings
+/- 1 Standard Deviation from Equilibrium P/E
+/- 2 Standard Deviations from Equilibrium P/E
1980 1985 1990 1995 2000 2005 2010 2015
Source: RBC GAM
X
X
X
35
30
25
20
15
10
5
0
196019651970197519801985199019952000200520102015
Source: RBC GAM
30
25
20
15
10
5
0
S&P/TSX Composite Equilibrium
Normalized (Equilibrium) Price/Earnings Ratio
Jun. '12 Range: 1 Std. Dev.: 13.1x - 19.6x (Mid: 16.3x)
Jun. '12 Range: 2 Std. Dev.: 9.9x - 22.8x (Mid: 16.3x)
Current: 13.6x
P/E on Trailing 12 Months Earnings
+/- 1 Standard Deviation from Equilibrium P/E
+/- 2 Standard Deviations from Equilibrium P/E
Eurozone Datastream Index
Normalized (Equilibrium) Price/Earnings Ratio
Jun. '12 Range: 1 Std. Dev.: 11.4x - 17.1x (Mid: 14.2x)
Jun. '12 Range: 2 Std. Dev.: 8.6x - 19.9x (Mid: 14.2x)
Current: 11.1x
P/E on Trailing 12 Months Earnings
+/- 1 Standard Deviation from Equilibrium P/E
+/- 2 Standard Deviations from Equilibrium P/E
1980 1985 1990 1995 2000 2005 2010 2015
Source: RBC GAM
SAMPLE
United Kingdom Datastream Index
Normalized (Equilibrium) Price/Earnings Ratio
Jun. '12 Range: 1 Std. Dev.: 6.9x - 11.1x (Mid: 9.0x)
Jun. '12 Range: 2 Std. Dev.: 4.8x - 13.2x (Mid: 9.0x)
Current: 9.5x
5
P/E on Trailing 12 Months Earnings
+/- 1 Standard Deviation from Equilibrium P/E
+/- 2 Standard Deviations from Equilibrium P/E
0
1980 1985 1990 1995 2000 2005 2010 2015
Source: RBC GAM
21
19
17
15
13
11
9
7
5
Emerging Market Datastream Index
Normalized (Equilibrium) Price/Earnings Ratio
Jun. '12 Range: 1 Std. Dev.: 10.7x - 14.9x (Mid: 12.8x)
Jun. '12 Range: 2 Std. Dev.: 8.7x - 17.0x (Mid: 12.8x)
Current: 11.1x
P/E on Trailing 12 Months Earnings
+/- 1 Standard Deviation from Equilibrium P/E
+/- 2 Standard Deviations from Equilibrium P/E
2000 2005 2010 2015
Source: RBC GAM
The global investment outlook RBC INVESTMENT Strategy coMMITTEE Summer 2012 I 33