Many asset classes, both at home and overseas, ran into heavy weather over the past month, principally because markets started to confront the reality rather than the distant prospect of more-normal monetary policy in the United States. Many asset valuations had made sense only when interest rates looked likely to remain very low, and thus were vulnerable when the tide started to turn. There are likely to be further episodes of valuation reassessment in coming months as investors continue to rethink asset prices against a background of only modest global economic growth. New Zealand assets, in contrast, have fared relatively well and may continue to do so, given the strength of the current business cycle.
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