PARAMOUNT PICTURES / C20TH FOX / LIGHTSTORM ENTERTAINMENT / Ronald Grant Archive / Mary Evans Keep dancing, or get in line?Imagine it’s 1912 and you find yourself on the Titanic’s maiden voyage. You know that the ship is going to sink, but you’re sketchy on when it’s going to happen. What should you do? This scenario is similar to the current predicament for investors, where almost all asset classes are expensive when using standard valuation techniques. The answer for both situations is the same: you should spend your time loitering around the lifeboats. The current environment In recent months, many have called out the predicament faced by investors. Global price/earnings ratios for stocks are high and the quality of earnings used in those ratios is questionable. Credit spreads are low for both investment-grade and high-yield debt in pretty much every jurisdiction. Commodities have performed well this year, in large part due to the credit inflated economic growth of China. Emerging markets can look cheap, but their continued growth could be threatened by a weaker China, a stronger U.S. dollar or domestic instabilities. Returns on cash and short-term debt instruments are profoundly negative after tax and inflation in Europe, Japan and the U.S. Investors seem trapped everywhere they turn.via