“Historically, that’s not a good starting point for future long-term market returns. Granted that was exactly the same situation as a year ago, but nonetheless, that doesn’t change the fact that historically higher valuations eventually translate into lower long-term returns,” Vanneman said.

“Corporate earnings growth has been great, about 20% year-over-year, and tax reform might help short-term, but earnings growth is already high and appears to be toppy,” he said. “Typically, the best stock market returns are when earnings growth is improving from low levels. That’s not where we are currently at in the cycle.”

CLS, which manages more than $8.5 billion, uses exchange traded funds to build portfolios for its clients. Prior to joining CLS in 2012, Vanneman was chief investment officer at Kobren Insight Management and a senior analyst at Fidelity Management & Research in Boston.

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