Last updated: 07:51 / Thursday, 8 November 2018
2013 Nobel Laureate

Shiller: "You Must Have Exposure To The United States Even Though It Is One Of The Most Expensive Markets In The World"

Shiller: "You Must Have Exposure To The United States Even Though It Is One Of The Most Expensive Markets In The World"

According to Robert Shiller, Nobel laureate in economics 2013, economic growth is good in the United States and although there is concern about high valuations, he does not predict a near collapse.

In his last visit to Mexico, to celebrate the launch of the Ossiam Shiller Barclays ETF in the Mexican Global Market (SIC in Spanish), the economist told Funds Society about the importance of geographic diversification and added that, within it, exposure to the United States should be kept, even though "the US market is at high valuations with a cap ratio of 30".

"Despite the short-term fluctuations that come and go, I think we should not think that a bear market is approaching and I think that we should have some exposure to the United States that, although it is one of the most expensive markets in the world, continues to behave positively. The key is not to put all the eggs in the US basket, but to diversify," he added.

In his opinion, one way to get exposure to this market is to look for instruments that have a value-focused approach, such as the ETF that replicates the index resulting from its collaboration with Barclays.

However, he warns that markets are not only about interest rates and their effect, but the ideas of people. Currently we have important changes in the political sphere of the United States and many places in the world, including Mexico, and according to the economist, "one would have believed that the markets had suffered, which did not happen on a large scale..."

In his opinion, "the way the economy looks is changing. It is becoming less theoretical, less mathematical, less abstract and is becoming more practical. Now it is giving greater importance to the narrative that accompanies it," he mentions adding that, "the desire and willingness of people to invest and take risk changes over time and the narrative they live."


The economist, who personally has exposure to Mexico in his investments and considers the country as a key player in the global economy, commented that "the next government of Mexico, headed by Andrés Manuel López Obrador, should give certainty and security to investors" .

About the airport, Schiller said: "I do not know if Mexico needs a new airport, but I hope that this can be resolved in a way that all the people who made investments and plans feel that they made a good agreement ... It is important that the new president encourages investors to feel that there is a safe environment to invest." He concluded.