The shadows of the 2008 global financial crisis (GFC) seems almost a forgotten part of history for some investors. But it is time to be careful as an investor.
RETURNS COMPARED TO PRE-GFC HIGHS OF 2007/08
Country NZ AU US UK
Month end high up 10% up 5% up 19% flat line
What this means is that share markets are above their all time highs.
Investors need to be wary of the potential impact of the changes going on in the US. The slowing of the economic stimulus and the potential rise in interest rates around the world will negatively impact on share markets and stock selection will again become very important. Blindly following the market could prove to be costly.
My advice is to think about where your money is invested and what would happen to capital values and cash flows when interest rates again hit 8.5%.
John Barber