Economy softening but shares soaring?

Discussion in 'Property Market Economics' started by MTR, 1st Aug, 2019.

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  1. MTR

    MTR Material Girl Premium Member

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  2. Speede

    Speede Well-Known Member

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    A wannabe Mexican
    Low rates.
     
  3. Rex

    Rex Well-Known Member

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    Savers putting their money in equities instead of in the bank to get a meaningful return.
     
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  4. kierank

    kierank Well-Known Member

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    Falling/low inflation => share market rises

    Rising/high inflation => property market rises

    Where are we now?

    That is one reason why I am a B+H investor in both markets
     
  5. MTR

    MTR Material Girl Premium Member

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    Even though we are in a low interest environment, property has gone south due to credit squeeze

    So easier to source finance with shares??? Also Can go in at price point to suits budget, whether that is finance or cash

    Higher yields making this more attractive option? Property yields averaging perhaps 3-4%

    Broad question....What do you consider a good yield in share market?
     
  6. Barny

    Barny Well-Known Member

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    Australia's ageing population looking for higher returns. Seems the lower rates go the higher the market will rise. Following the us
     
  7. willair

    willair Well-Known Member Premium Member

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    Anyone can randomly throw darts at the above ,and where it lands it may well come with confidence and serenity..
    With yields most i talk too within commsec work on the Russian Roulette 9-5 x5-9 layout ..
     
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  8. Waterboy

    Waterboy Well-Known Member

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    ASX is following international sentiment, if you look at the US Dow Jones or S&P 500 side by side with ASX 200 you will see a similar move.
     
  9. kingstreet75

    kingstreet75 Well-Known Member

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    Not to mention a lot of savers losing their money to scams, hunting for ways to make their money grow.
    This family's future 'collapsed' with a single WhatsApp message
     
  10. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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  11. Kangabanga

    Kangabanga Well-Known Member

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    The main theory is when interest rates go down, it is taken as an injection of liquidity into the economy. It takes months for the rate drops to filter into the economy.There's also the expectation of tax cuts helping boost the economy.

    Since stock valuations are supposedly forward looking, this "injection of liquidity" is thus reflected in increased stock prices in expectation that company earnings would rise in the future.

    However it will take a few months for any weakness in the economic numbers like GDP, to actually show up in the earnings of companies as they only report earnings every three months (which is further delayed a couple of months to prepare the financial reports). When that happens the market will have another readjustment.

    As always, there is no strict rule or correlation, its all based on expectations. If funds expect a recession, stock market will tank. If they expect central bank support and "liquidity injections" then stocks will rise.
     
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  12. mickyyyy

    mickyyyy Well-Known Member

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    Agreed!
     
  13. Waterboy

    Waterboy Well-Known Member

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  14. Perthguy

    Perthguy Well-Known Member

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  15. Waterboy

    Waterboy Well-Known Member

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    I very much prefer US Shares.

    Performed better for me, especially with the free falling AUD.
     
    Last edited: 7th Aug, 2019
  16. 2FAST4U

    2FAST4U Well-Known Member

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  17. Waterboy

    Waterboy Well-Known Member

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    Anyone who takes out Personal Loans is either innumerate or desperate.

    20% interest for a European "vacation" anyone?
     
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  18. Rex

    Rex Well-Known Member

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    I can't imagine how much they must obliterate your serviceability.
     
  19. 2FAST4U

    2FAST4U Well-Known Member

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    Agreed. The most common reasons for personal loans are to purchase cars and to consolidate debt. Unlike property chat the vast majority of Aussies live from pay to pay. If they are renting and they need a new / second hand car they go out and get a personal loan.
     
  20. Eleven

    Eleven Well-Known Member

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    Dividends and franking credits. Low deposit rates and increasing property taxes are a few good reasons.