Australian Investment Blog

Clarifying my thoughts on the Australian “Big Four” Banks

Last week, stocks worldwide experienced their largest rally in nearly two years as the US implied strongly they were in no hurry to raise rates – see chart 1. Interest rates have never been so low in history ($2.8 trillion of assets in Europe with negative yield), driving equities higher as investors stampede into riskier investments in an attempt to receive some coveted yield. When investors decide to “get off the yield train”, it will literally be a stampede and losses will be incurred extremely quickly, but obviously nobody has any definitive idea when the “music will stop” it’s all about prudent money management from here.