What do low interest rates mean for equity markets?
The last 30-40 years has seen a dramatic shift down in interest rates for much of the developed world. For example, the ten-year government bond yields in Australia and the US have declined from around 14 per cent in the early 80s to more recently lie somewhere not unadjacent to zero.
This relentless shift down in rates has naturally had profound implications for bond prices which are tied to rates by some straightforward math that requires the price of a bond to equal the coupon divided by the yield.
Tim joined Montgomery in July 2012 and is a senior member of the investment team. Prior to this, Tim was an Executive Director in the corporate advisory division of Gresham Partners, where he worked for 17 years. Tim focuses on quant investing and market-neutral strategies.
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