The major U.S. stock indexes have just recently hit all-time highs. Some may be beginning to wonder if equities have become overvalued compared to other asset classes. Presently, investors can get just below a 4% annual yield return from the 10-year U.S. Treasury note. The “Fed model” is a popular market-timing tool used to gauge whether stocks are over- or under-valued. The model suggests stocks will outperform bonds by about 4.5% per year over the coming decade. Not all agree the Fed model is the best way to value stocks. However, the four-year U.S. presidential election cycle dating back nearly 100 years shows the fourth year of a sitting president’s term is a good one for the stock market. Stay tuned! Jim Wyckoff