Best-in-class returns have led to a dramatic increase in the value of stocks and bonds, which in turn have driven a boom in interest rates.
The result is a global stock market bubble that is sucking the economy dry.
In the short term, investors have been able to keep buying more stocks, which is great news for investors, but it means that they can’t borrow as much money to buy them.
“We need to pay the price,” said Andrew Cairns, the head of investment strategy at investment firm Macquarie Group.
The stock market has reached an all-time high and there are many people out there who want to get in and out as quickly as possible.
“They’re worried that the bubble is going to burst,” said Cairnes, adding that they need to be ready to sell their shares as soon as the bubble pops.
The market has soared by more than 300% in the past six years, but most investors are still in the market for the short-term.