Investec: Expect equity markets to peak 18 - 24 months after first rate rise

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Investec: Expect equity markets to peak 18 - 24 months after first rate rise. The end of QE3 in the US has thrust the prospect of rising interest rates under even closer scrutiny for investors. Christine Baalham, portfolio manager at Investec Asset Management says while markets tend to get nervous leading into the first rate rises the actually impact on equities tends to be limited. Baalhm says, typically, equity markets tend to continue rising and peak about 18 to 24 months after the first rate rise. That is certainly what we expect to happen in this cycle. Demand for yield will continue to grow even as interest rates normalise, buoyed by a structural shift in the -demographics of the Western world that creates an ageing investor base needing income in retirement, she said. Full article in the AFR (paywall): (VIEW LINK)

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