Kieron Launder: 2019 second quarter update
Risk assets and safe havens both benefit from easier monetary policy
Equities, government bonds and gold all rallied during the second quarter. The key driver of the strong performance across asset classes was the prospect of interest rate cuts from the Federal Reserve.
Valuations not extreme given current inflation environment
While valuation multiples look high compared to the overall historical average, they are less so when compared to periods with similar levels of inflation.
Lower interest rates supportive of growth equities
High growth companies offer the prospect of big profits in the future. When interest rates are low and growth is scare – as is the case today - investors are more willing to back companies that promise jam tomorrow.