19 Feb Three reasons why low inflation is good for shares and property
Key Points:
- Shares are vulnerable to a short-term correction.
- But with inflation low, and as long as recession is not imminent, it makes sense that traditional valuations like PEs are higher than their long-term average.
- Similarly, it makes sense that property yields are lower than normal, but the fall in Australian housing yields has been extreme relative to commercial property & shares.
- Key things to watch out for are recession and much higher inflation.
