Oliver's Insights - Are shares good value and what about bank deposits?
16 Sept 2010 This note looks at whether shares are expensive or cheap and how they compare to alternatives such as government bonds and Australian bank term deposits.
The key points are as follows:
- Shares are cheap using forward price to earnings ratios and when comparing the level of the dividend yield to the bond yield. Thanks to low government bond yields and higher dividend yields, shares should provide a good risk premium over bonds for the decade ahead.
