Five years after the beginning of the Financial Crisis and the continual manipulation and distortion of financial markets, we present asset returns for this unfortunate era. Draw your own conclusions as to the effectiveness of fiat money creation, keeping in mind that world economic growth in the same time frame has been tepid and debt to GDP ratios in the Western World have exploded.
Forget about the current level of certain asset markets and think about what returns are embedded in current valuations. Valuations (the expected discounted cash flows of an asset over the holding period) determine future returns, and in absence of the unsustainable manipulation of the last 5 years, I think it's safe to say caveat emptor. Which asset classes are "rich"?? Where's the crowded trade?? What are the known unknowns and the unknown unknowns??
