This is the longest cycle of high returns on shares and debt, if you count from 1871. This is a unique episode in nature, despite the failures of 2000 and 2008.What helped the market grow?In the period 1982-2013 gg. investment portfolio with 50% US stocks and 50% of 30-year Treasuries gained 8% on the invested capital - at AMarkets materials.
1. In the early '80s P.Volker headed for the fight against inflation. It became clear that inflation - the enemy of the stock of assets. Raising the interest rate turned out to be a convenient tool for controlling inflation.
2. Falling interest rates - a natural after-effects of the incident inflyatsii.V 1982 the 30-year Treasury debt traded with a yield of 14.2%. Reduced rates to zero Treasuries led to a level of profitability of 2.3%.
3. Improving profitability of American corporations. Companies began to improve profit performance, when inflation began to decline. Company actively increased their productivity. The growth of the dollar and the strengthening of international trade - factors that only helped to improve financial performance.
4. grew because stocks were severely underestimated. In 1982, the broad market index had a record of P / E at a level of 7.7 - a 31-year-old anti-record.
5. American population showed great interest in the stock market. So, deposit rates have been unattractive, while inflation grew - people prefer to invest in shares.
6. Supercycle assets in the debt market. Low interest rates and a decrease in the control of the authorities of the stock market led to a rise in demand for debt instruments.
Investors, who have been in the market in the period 1982-2013 gg. very lucky. Such returns for a long time will not. What will happen next, if the period of "superr" almost left behind? Most likely, turn down and rather flat speaker, slightly diluted episodic crises.
