Shares RouteMap: Chart Library

The investment strategies used to choose countries and regions in our Research Universe

 

All charts use broad national market indexes or the set of regional and global P/T Global Stock Market Indexes as the basis for analysis. Indexes are all shown on the basis of price only. See a sample chart for each investing strategy used in the Shares RouteMap, including the complete simulated record of signals, where appropriate. Check out long-term performance simulation for market timing strategies

 

Momentum & Value Summary:- This chart is intended to show the overall attractiveness of shares based on fundamental analysis. The charts show the extent of over - or under-valuation of stock markets compared to fair value generated by econometric modelling, from which Best Guesses as to the future are also generated. For more detailed analysis, see Momentum, Profits and Valuation charts.
  Chart Technical Analysis:- Based on the idea that the trend is your friend, this chart generates Buy & Sell signals using technical analysis. Thus signals depend only on price information available at the time. It relies on analysis of rates of change as well as moving averages. This chart is based on the observation that the psychological effect of a shock takes about a year to wear off, and is based on the Coppock Curve, together with moving average and divergence analysis.
  Investment Sentiment: - Nobody gets it always right and nobody gets it always wrong, but there is a tendency for some kinds of investor to out-perform well and others to under-perform. This strategy combines as many such indicators for each market as possible whose track record over the past decade has been proved to be effective. While individual indicators may be erratic, these composite indicators can be excellent predictors of year ahead performance.

 

Short Term Real Interest Rates:- This chart is intended to predict share prices based on government policies, using data available at the time on monetary policy, specifically interest rates or real effective exchange rates, as calculated by PIT for all countries in the database. Interest rates are useful in absolute terms but for relative performance real effective exchange rates work better.

 

Valuation vs. Other Assets:- This chart is intended to show the attractiveness of the stock market against alternative assets competing for the funds of domestic investors. It is designed not only to show the current position but also to provide a best guess as to the future trend. This is useful for spotting extremes of over- or under-valuation. It does so by comparing the PE ratio against short-term interest rates and also to the yield on long-term bonds, where available.
  Earnings Per Share:- This chart is intended to show the influence on share prices of company profits. It is designed not only to show the historic relationship but also to provide a best guess as to the future trend. PIT has developed an econometric model to forecast these from the top-down, so as to avoid the widespread tendency for over-optimism generated by aggregating bottom-up estimates.

 

Seasonal Trading Patterns:- This chart is designed to exploit short-term trading patterns, and is intended for traders, arbitrage plays over time and to assist long-term investors in fine-tuning entry and exit points. It uses end-month data to illustrate seasonal trading patterns. The chart shows the cumulative performance through the year, based on short, medium and long-term historical records.

 

Cyclically-Adjusted Real P/E: Earnings per Share are the most useful basis for valuing shares, but the trouble is that they can fluctuate wildly, so any single year's profits may be a poor guide to sustainable profitability, so this is based on the average EPS recorded over the past four years, as this is the most common duration of investment cycles. The ratio is also adjusted for inflation over the same period. The charts show the discount or premium versus long term average.

 

Market Capitalisation / GDP:- This chart is especially relevant for identifying major stock market bubbles or depressions, by looking beyond the current level of company profitability. It is intended to perform for whole markets a similar role to that carried out by Price/Sales ratios for the analysis of individual companies. The series have been adjusted to correct for the influence of capital changes.

 

Chronology of Events:- This high magnification chart is designed to study the significance of past events - economic, political, international or market-specific. As this chart is much larger than the screen, scroll bars enable the user to locate any point over the past quarter century to examine market action before and after the chosen event. To enhance magnification,  the financial history is divided into earlier and later periods.

Comparable charts are available for selecting Asset Classes in general and Investing Styles & Sectors, Government Bonds and Foreign Currency in particular.

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Stock Market Charts are part of the free international investment seminar. Just follow the classroom signs alongside, either now or come back here later, when you have looked at whichever chart types in this section of the library interest you. At the end of each class, there is a sign to the beginning of the Next Class.