Outlook for Investment Markets
There have been two conflicting trends at work in the financial markets. In the U.S., the Fed is closer to tightening monetary policy and bond yields have risen: U.S. equities and property have weakened. The opposite is happening in Europe where policy has let rip and eurozone equities, bonds and property have risen strongly. While the global economy is likely to continue to do reasonably well in the rest of the year, there will be pronounced differences in regional investment performance. In New Zealand, the economy is still performing robustly and the current cycle looks to have some years to run. Much of the payoff for investors, however, has already been realised in asset prices and further upside may be limited.
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