The Numbers Don't Lie

I recently completed an interesting exercise, comparing some figures I stumbled across from three years ago. There’s lots of numbers I know, but I thought some would find this interesting…

Relative to three years ago, all Markets (except Emerging), on a Price to Earnings (PE) basis are on average today, more expensive on a rolling twenty year basis.

NZ’s market is 22% more expensive than we were three years ago. Our gains are by far and away the most impressive, though all markets have risen. Europe has been the laggard. Today the world PE trades at 16.1x. The average of the last twenty years is 15.7x. Given where interest rates are, relative to the last twenty years, this doesn’t feel dramatically excessive.

And then there’s the NZD story. Shown below is the NZD relative to the USD, AUD, EUR & GBP over the last 5 years:

Tony Munro CFP AFA

The views and opinions expressed in this article are intended to be of a general nature and do not constitute personalised advice for an individual client.

A disclosure statement is available on request and free of charge.

#pricetoearnings #currency

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