Columbia Threadneedle: Estimating impact market disorder on asset prices


Asset prices consist largely of forward-looking expectations, but they also contain information about the current state of the financial system itself

Asset prices contain enormous amounts of information. This information is typically characterised as being both forward-looking and related to the economy – money-weighted investor expectations about future company earnings, defaults, inflation, monetary and fiscal policy. And, in our opinion, this is almost right. Asset prices consist largely of forward-looking expectations, but they also contain information about the current state of the financial system itself. Read article