Olivers Insights - Where are we in the global investment cycle and what's the risk of a 1987 style crash?
Where are we in the global investment cycle and what's the risk of a 1987 style crash?
Article by Shane Oliver, Head of Investment Strategy and Chief Economist.
The following note takes a look at where we are in the global investment cycle and comparisons between today and the period prior to the 1987 share market crash.
The key points are as follows:
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- 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.