With equity markets up more than 250% since the 2009 lows and slightly off all-time highs, we think it is especially important to ask whether the underlying fundamentals justify these moves. We also think it is important to be mindful of how an annual rebalance, steering a portfolio back to an underlying fundamental such as dividends, can help manage valuation risks.

WisdomTree conducts the annual rebalance of its U.S. dividend Index family in December of each year, with the annual screening date occurring on the last trading day of November. The annual screening process provides a plethora of data about how dividends for the U.S. equity markets have changed over time, and gives important information about the underlying market fundamentals.

With equity markets forging new all-time highs, we think it is especially important to ask whether these moves are justified by the underlying fundamentals. We also think it is important to be mindful of how an annual rebalance, steering a portfolio back to an underlying fundamental such as dividends, can help manage valuation risks.

Dividends, a key gauge of the market’s underlying fundamentals, continue to set new highs with another year of double-digit growth.

During periods of strong short-term performance, as seen in 2013, it is especially important to ask whether these moves are justified by the underlying fundamentals.