The big rewind: CPD

January 17, 2017

In this CPD-accredited article published by AdviserVoice, Epoch’s Bill Priest and Kevin Hebner consider the factors most likely to impact global sharemarkets over the coming year.

Over the past five years, the collapse in interest rates has fuelled a huge stock market rally. The S&P 500 Index rose over 90% and the MSCI World Index gained nearly 80%. More than two-thirds of the gain in the S&P 500 and over 85% of the rise in the MSCI World came from P/E ratio expansion. In other words, the discount rate applied to cash flows declined sharply and fuelled a massive rise in equity asset prices.

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