Monthly Market Report - October 2017

1st October 2017

With commentary from David Stevenson

My hunch is that most investors have grown rather blasé about the increase in asset prices following quantitative easing and the recovery from the global financial crisis. We’re all collectively rather good at post-hoc justifying the increased value of shares by pointing to surging corporate earnings, hiked dividends and abundant cashflows – barely conceding that surging share prices might have more to do with central banks unleashing a torrent of new money into the system. A cleaner measure is to look at assets favored by the rich and wealthy – in these specialist niches we can directly see the huge impact that ample liquidity has had on the value of everything from emotional assets (such as rare cars) through to second homes in the best locations. Private bank Coutts has been tracking via a proprietary index this range of desirable items for much of the last 12 years – see the chart below for the latest numbers. 

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