[antihipocrat]

Assets have increased in value because interest rates are close to zero per cent. Other investment classes (like bonds and cash savings) have a similar return on investment to the interest rate i.e. close to zero. In this scenario it makes sense to go for assets like property and shares because the opportunity cost is favorable.

One of the most straightforward ways the asset bubble will pop is if interest rates rise. For interest rates to rise there needs to be inflation at high levels for at least a couple of quarters. If we see another few months of inflation above 4% the fed will need to signal shift toward increasing the interest rate, only then will we start to see a rebalancing of investments away from assets and back into cash.