Fundamentals Do Matter

An index with more high-margin, high-growth companies is not more expensive than an index where the greatest weights are traditional sectors without organic growth.

Looking ahead to the next few months, we will have to analyze in great detail the evolution of fundamentals, at the macro level, profits, cash, and margins. The recent rebound has caused many companies today to trade at unjustified multiples in most countries. This is why we must be especially cautious about believing in the magical placebo effect of central banks. The European investor should have already learned that the ECB does not give away returns in the stock market.

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