Less Upside in America than Elsewhere

This chart shows profits relative to GDP. In other words, it shows profit margins. Combine America’s record profit margins with high valuations and its a recipe for poor returns over the next five years.

Conversely, profit margins in the rest of the world are much lower (so there is expansion potential). Valuations in emerging markets in particular are much better.

Anyone who ignores this chart and buys into a bull market in its 5th year after a spectacular run, does at their own peril.