Advisor Website Home | Contact Us | Site Map | Help | Career Opportunities

U.S. stocks showing strength

Joyce Gordon
Porfolio counselor
Based in:
Los Angeles office
Investment experience:

JOYCE GORDON: It’s a very good time for equities in the U.S. We’re still seeing housing improving, and I think there’s still a lot of room for that to run. Auto sales are still fairly strong, and I think that they continue to stay strong. Industrials are gaining strength.

We’re seeing dividends rise, and rather than one sector that’s going to be propelling the economy, I think you just see it a little bit everywhere, where we see a little bit better hiring trends. And I don’t think we’re at the point yet where inflation is going to creep back in.

The U.S. market is up a lot, but we’re not trading at a very lofty price/earnings multiple. We’re trading [approximately] 16 times. And I don’t think that earnings are vulnerable for the U.S economy. I see them continuing to grow and bringing with it dividend growth, which is a good underpinning for the valuations in the market.

It feels pretty good for the U.S. However, there are some areas within the U.S. that are at lofty valuations. If you look at consumer staples and utilities in the U.S., they’re not really in unchartered territory, but they’re awfully high given their history. So we just dig a little deeper — find other companies in other industries that offer more value — and we look globally, too.

Past results are not predictive of results in future periods.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investing outside the U.S. involves additional risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries.

Capital Research and Management Company, the investment adviser to the American Funds, manages equity assets through three investment divisions. These divisions make investment and proxy voting decisions independently.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

The statements included here are the opinions and beliefs of the speaker(s) expressed at the time the commentary was recorded and are not intended to represent those persons' opinions and beliefs at any other time.