- Originally posted by foundation:
Oh dear, one of my pet hates – the investment clock!
Why? Because every investment clock I have ever seen is either broken or has been broken! The very concept requires that the primary variable is time, with every event on the clock being intrinsically linked to a previous one…1) The London School of Economics ‘Economic Clock’ has events in this order:
+ Falling interest rates
+ Recession
+ Rising share prices
+ (Rising) real estate
+ Rising interest rates
+ Falling share pricesWhen what we’ve actually seen is:
+ Falling share prices
+ Falling interest rates
+ Rising real estate
+ Rising share prices
+ Rising interest rates
+ Falling house pricesSo where does that place us?
Falling Share Prices???
This just tells me there is a close correlation between shares and property.2) The European Property Clock+This diagram illustrates where Jones Lang LaSalle estimates each prime office market is within its individual rental cycle as at end June 2003.
+ Markets can move around the clock at different speeds and directions.The relevance is the distinctions between different countries where some had had their boom and others were about to.
Given that the four positions on this clock are:
+ Rents falling
+ Rents bottoming out
+ Rental growth accelerating
+ Rental growth slowing
and the only direction options are forward & backward, how could any market move in a different direction?
ie:
+ Rental growth slowing
+ Rental growth accelerating
+ Rents bottoming out
+ Rents falling
and how could this possibly relate to the Australian rental market where rents only ever go up?Sorry, I thought you believed rents were about to fall? Anyway, it was referring to office rents, not residential rents. The fact still remains that different geographic areas move at different speeds which is why speculators/arbitrageurs attempt to pick the next growth area.
Cheers
Jeff
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