Australian Investment Blog

How much do we think Central Banks are controlling Equities? A number of subscribers have asked over recent times why we mention the Central Banks so often when considering our view on the future direction for stocks. Hopefully today we can explain this in a very simple manner. Hence this should also help explain a large part of our medium term view for stocks. There is no doubt that since the GFC back in 2007/8 Central Banks and their respective policies have arguably played the most determining role ever in supporting equities. Central Banks have cut interest rates below zero, pumped money into world economies in unprecedented levels in a desperate effort to stop the world falling into a deep recession / depression. Considering the damage of the GFC, and more importantly the reasons of greed / excess which caused it in the first place, we believe they have performed a great job....so far.
Show more...