For what it’s worth: why what you pay for an investment is a key driver of its return…

For what it’s worth: why what you pay for an investment is a key driver of

its return…and how do valuations look now?

Dr Shane Oliver, Head of Investment Strategy & Chief Economist insights

Starting point valuations – like yields and price to earnings ratios – are key drivers of medium-term investment returns.

For growth assets it’s often more complicated, with the level of interest rates playing a big role.

At present, valuation starting points for term deposits and bonds have improved. For shares they suggest constrained return potential from US shares but are better for Australia.