Why investors are buying the banks

Bank shares have surpassed valuation metrics as investors continue to dive in for yield. Is this a viable strategy?

Summary: Many investors may be questioning whether they should sell bank shares given the market’s sentiment that valuations have become too stretched. Before they do, however, they need to keep in mind a fundamental difference that has developed in the investment landscape: With interest rates at record lows, the reliability of bank yields of between 6.5 per cent and 7.5 per cent remains attractive compared to the broader market.

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