The theme to dominate this decade in markets

The last 40 years in financial markets have been heavily influenced by a very important factor: falling interest rates. A look at the 10-year US bond yield shows that it peaked in '81 at around 16%, and since then it's been moving steadily lower, marching inevitably towards zero. Paul Moore, founder and Chief Investment Officer at PM Capital, believes this trend has now passed an inflection point. Rates have bottomed in the US and Europe, and inflation might not be as far away as many expect.

"You're slowly seeing the conditions put in place for inflation to be underpinned. Every central bank wants to create inflation. Ultimately, they'll get what they asked for. They might not want it when they finally get it, but they will get it."

He says that this trend will have far reaching implications across all asset markets, but for equity investors it means that the types of investments that have worked well in the past, won't in the future. And likewise, some investments that have been out of favour, could be due for a comeback.

Tune in to the latest episode of The Rules of Investing, presented by Livewire Markets, to hear his take on which assets are set to benefit and which will suffer.

Time stamps

• 2:08 – Paul’s career beginnings - The golden era at BT and stories from that time
• 4:33 – Financial crashes and the lessons taken from them
  
• 8:54 – Value vs. growth: valuation disparities and timing the market
• 12:46 – The most challenging investment in his career
  
• 18:28 – A bottom up and investment thematic approach
• 22:11 – The investment theme that will dominate the coming decades
• 26:43 – The reason for LICs’ discount in Australia
• 31:53 – Why he doesn’t own US tech megacaps
• 35:39 – A recent investment PM Capital has made
• 39:38 – Paul answers our ‘Three favourite questions’

Discussed in the podcast

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