After QE3, BOJ, ECB then Australia. All pointed to direction lowering their interest rate to spur growth. Secondly lowering its currency values to increase export competitiveness. Latest is Central Bank of Korea decided to cut rate as well.
We believe the fact that world economy still weak, inflation stable due to weak buying power. Trade war increase between nations by lowering currency. He main cause started all from US debt ratio, 2009 credit crisis and QEs by FED.
The potential results are if world economy successful recovered and debt issues can be balanced. Eventually interest rate will reverse it trend. Market will start to digest or correct back. But I foresee that is going to be another years to come. By then, inflation will catch up and level rate increase resulting in potentially non pull back of all market.
Another extreme scenario is the printing money policy failed. Interest rate lowered but failed to spur growth. Debt issues cannot be balanced. World economy crash and enter into a long term correction. But it will be also many years to come.
Thus, we continue to suggest defensive full investment bias to asset oriented equities, REITs, properties and commodities. Healthy debt ratio is important when everything is creating new high. We suggest the max level is 2 times to your total investable asset.