March 12, 2021

2021 Index Research Update on 92 markets covered



How do you answer the question: Where in the world are stocks cheap? This is what the Obermatt Index Research does. It applies the Obermatt Method not on individual stocks but on an entire index. The benefit is that you can see value, growth and safety on entire markets. This is better than how markets are typically analysed by researchers and journalists because it neutralizes the sector impact in indexes.

In this Podcast, Obermatt CEO Dr. Hermann J. Stern discusses the results of the annual Obermatt Index Research exercise: By February 2021, most of the US markets are expensive (with low Value Ranks) while at the same time exhibiting above average growth. This is to be expected. High growth markets are expected to be expensive.

India is also among the top which means that it is rather expensive to invest in India. This is surprising because India is not a fully developed market with similar institutional frameworks as the other low value countries. The good value of Russia, Turkey and Taiwan are expected because these are risky places where investors are less willing to invest and thus pay lower prices for their investments.

As Stern explains in the Podcast, you cannot expect a special return benefit from investing in high value markets as you can from investing in high value stocks. This is because markets consist of many assets and are therefore more sensibly priced as individual stocks. Future changes in market returns are explained by changes in future expectations.



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