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Insights from our annual roundtable on the best stocks and the biggest risks. Every party has to end sometime. That’s the troubling thought that’s been nagging at many investors this year, even as they’ve continued to profit from one of the longest-running bull markets for stocks in history. This year’s panel included David Giroux, chief investment officer for equity and multi-asset at T. FORTUNE: I’d like to ask about the very long bull run that we’ve had in stocks.
The bull market is almost nine years old. Some Cassandras, myself included, have been worried that markets are overvalued, especially in the U. Is a slowdown or even a market correction looking more likely in 2018? SAVITA SUBRAMANIAN: It does feel sort of unsettling. By next July if the market continues to go up, we’ll be in officially the longest bull market, by technical definitions, in history. And it doesn’t feel good to buy equities now. But if you think about 1999, it was a year where valuations were getting high.
It didn’t feel great to buy equities, yet that was one of the best years of that bull market. It also turns out that valuations are a really lousy market-timing model. FORTUNE: You invoked 1999: One of the better performing areas of the market in the past year has been, once again, technology. But, Dan, you were saying that tech valuations, relative to history, are not that high.
So by that measure, technology and health care actually remain reasonably valued. BYRON DEETER: We passed some major milestones last year that I think speak to the fundamental performance of these tech businesses. And as you think about the trends ahead—mobility, machine learning, cloud computing—a lot of these tailwind trends that are ripping through large portions of the economy are increasing and going to continue. KERA VAN VALEN: We’ve also moved from a market that’s been fueled by quantitative easing to one where it’s actual fundamentals—earnings growth, cash flow growth—that have driven the markets. We think that can continue, so we’re not looking for a correction by any means. We think can continue, so we’re not looking for a correction by any means.