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Interest earned on asset investments may be getting smaller and smaller but with inflation at 2% or less, investors are still coming out on top aren't they? So,
by corford 12y ago
Interest earned on asset investments may be getting smaller and smaller but with inflation at 2% or less, investors are still coming out on top aren't they? So, doesn't this only become a real problem if inflation goes up markedly? Also, if it is a bubble and it pops, wont that mean that for many of those asset classes, investing will subsequently be viewed as more risky and the interest offered increased accordingly? And if inflation does go up, making current returns on asset investment unattractive wont that choke investor demand and force asset owners to offer better interest rates?
Apologies for my economics 101 questions. I like finance but don't pretend to know much about it or understand any of it :)
*Note: when I say assets I'm thinking more bonds, treasuries etc. than physical real estate.