Ben Carlson: When Market Signals Look Too Good To Be True

Ted

FYI: Interest rates are a huge driving force behind many investment decisions. You can call them discount rates, hurdle rates, lending rates, borrowing rates or whatever, but their level definitely has an affect on risk appetites.

But I also think it’s possible for investors to put too much faith into the almighty interest rate. For instance, there’s a huge difference between credit and interest rate levels. Rates were much higher in the mid-2000s but credit was much looser so people borrowed like crazy, something they’re not doing as much today.
Regards,
Ted
http://awealthofcommonsense.com/2016/10/when-market-signals-look-too-good-to-be-true/

Nick_de_Peyster

If interest rates in the U.S. can be used to justify P/E ratios in the U.S., then what does the same analysis for Europe and Japan say?

Nick de Peyster
http://undervaluedstocks.info

Ted

@MFO Members: Nick de Peyster is CIO at Genesis Wealth Advisors.
Regards,
Ted