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I'd be interested to see the value of the stock market compared to interest rates. My bet is the market is only a little bit high if you account for how low int
by workthrowaway27 9y ago
I'd be interested to see the value of the stock market compared to interest rates. My bet is the market is only a little bit high if you account for how low interest rates have been for the past ~10 years.
- deleted 9y ago[deleted]
- bduerst 9y agoDid you mean inflation rates? Because the interest rates control the cost of new money, while inflation reflects the change in value.
- dragonwriter 9y agoWell, interest rates are the yield an on alternative investment to stocks, so they make sense as a comparator, too.
- workthrowaway27 9y agoNo, I meant interest rates. There's an inverse correlation between interest rates and asset prices. Most governments have been keeping interest rates low since the financial crisis to spur investment, which causes asset rates to rise. So while asset prices are high on an absolute level interest rates are also much lower than the historical average. My guess is that if you account for interest rates being so low assets aren't priced all that highly.