History never repeats exactly

There appears to be more confusion than usual in share markets at the moment, not only regarding the direction of stock prices but also the likely magnitude of the next move.

The bearish view is that shares have had a good run over the past twelve months and are now due for a breather. Interest rates are probably headed higher because the oil price is strong and rising, unemployment is low and demand from China is pushing up commodity prices.

But are the pessimists jumping at shadows? There are no convincing signs of inflation just yet, shares are not expensive on most historical yardsticks and the local economy still looks healthy.

In our opinion, the two views may not be as far apart as they first appear. To see why, you need to separate short-term cyclical influences from long-term structural factors and understand how they have coalesced over the past few years.

AUSTRALIA


	House prices on the slippery slope
	Is this a banana peel I see before me?
	Fund managers steer clear of the U.S.
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	End of the road for gold shares

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