US stocks continue to remain elevated since the beginning of the year and the elections. Stocks in certain sectors such as financials have soared substantially since the elections.This week the tech-heavy NASDAQ crossed the record 6,000 mark. Despite the superb performance of US equities, investors need to be cautious since the P/E ratio of US stocks look steep relative to historical average and when compared to other markets.

From an article at Allianz Global Investors:

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The US Equity Market Is Highly Valued

The current price-to-earnings ratio of the US market is significantly higher than its 30-year average

Source: Datastream, MSCI, Shiller, AllianzGI as at 1 March 2017

The eight-year US equity bull market has time and again confounded its many detractors, helping US stocks remain among the top performers since the global financial crisis began. With such a history of strong results, it is easy to argue why many long-term investors should continue holding this asset class in their portfolios.

At the same time, the US equity market is highly valued – the current Case-Shiller price-to-earnings ratio of 29.8 is almost double its long-term average – leaving other investors to question whether this is currently the place to pursue growth potential and protect purchasing power.

Source: Six pressure points for US stocks, Allianz

The number of foreigners (i.e. foreign-born people) relative to total population varies across countries. Some countries such as those in Eastern Europe have low foreign-born population since they have been closed economies until the iron curtain fell. Luxembourg(LUX) and Switzerland (CHE) have the highest foreign-born population since they are tax havens. Mexico (MEX) and Poland(POL) have the lowest foreign-born population according to the latest OECD data. In the US, the rate is under 15%.

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Source: OECD Factbook 2015-2016