What investment returns can we expect from share markets?
The Australian and US share markets reached all-time highs at the end of last week. This is great news for superannuation returns and existing share investors. However, where will the markets go from here?When valuations are high, future returns will be lowThere is a strong negative correlation between the starting valuation multiple (e.g. price-earnings ratio) and an investor’s subsequent 10-year investment returns. That is, if current valuations are high, future returns are likely to be low. This makes sense because if you invest in a company or market that is currently fully valued, there…
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