Shane Oliver, Head of Investment Strategy and Chief Economist.
The following note looks at the global investment cycle and the risk of a 1987 style crash.
The key points are as follows:
- There is still little sign of the sort of excesses that precede major economic downturns and major bear markets suggesting that (although US shares are overdue a decent correction) we are still a fair way from the top in the investment cycle. Key to watch will be rising inflation and aggressive monetary tightening.
- The current environment around share markets is very different to 1987.