Price to Cash Flow, and Earnings Yield Spread over High Yield) our market is back below the average of the past 25 years. This is all the more impressive given that the Energy sector’s contribution to earnings has actually been negative so far in 2015. This is not to say that U.S. stocks are destined for a rally; as mentioned in previous communications, valuations make relatively poor timing tools. Since our 2nd Quarter 2014 market outlook “Pigs Get Slaughtered,” we have not had a strongly bullish outlook on risk assets.

While we did not forecast a 50%+ decline in oil, or recommend selling risk assets outright, we have been cautious about investors’ seemingly heedless attitude towards risk- and yield-seeking activities. We view the recent market volatility as a healthy way to reinvigorate a prudent level of analysis relative to required rates of return. If investors perceive that an asset can only go up, they will quickly drive the value of that asset to the point where there is no forward-looking positive expected return. We need markets to stay within a reasonable range of belief and skepticism to help create a sustainably up-trending market driven by long-term secular improvements in demand.

Whether or not we’ve seen the lows of the year for stocks is anyone’s guess, but it behooves investors to remember that today’s correction is the foundation for tomorrow’s market increase. Nothing contained in this publication is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional. Halbert Hargrove Quarterly Market View .