Deep Dive: 'Concerns over US valuations'

As 2022 gets under way, investors continue to express their concerns about lofty US equity valuations. And for good reason: US market returns have been dominated by a handful of growth names, like Tesla, Apple and Nvidia, which have high price-to-earnings ratios (P/Es) and the potential to underperform if, or more likely when, the Federal Reserve hikes interest rates. However, I believe there is an important distinction between ‘growth' and ‘speculative growth' stocks in the US. While I have concerns about the latter, I am happy to invest in quality growth businesses which are profita...