market revaluation 75 cents.

After some thought over the last couple of days I realize I have under estimated the market correction.
The effect of inflation will have a further impact on global sharer prices than I first thought.

When interest rates rise and the market converts to cash investors will likely be achieving 4 to 5% return.
Typically the market trades with expectations of 3% dividend above the bank rate.

Here is the issue
Typically the bank rate would be 3%,
The ASX 200 stock would provide 6% to 9% return which would cover three factors which are growth, inflation and risk. The growth of 3%, inflation of about 2%, risk 3% to 5% of holding a volatile growth investment.

What is different now.
Resources are at an all time high, inflation is high, return on investment is low and we are approaching a recession, interest rates are rising.
High inflation will impact the demand of investors for higher dividends in the asx.
I was originally only looking at the impact of the bank rate increases effect on dividend demands. This will help explain why BHP is providing 12% return and the market is not valuing them higher. High Inflation will play a larger role in effecting company valuation through expectation of higher dividends.

How will this effect RMS
Door 1 2.3% return in a deflationary gold market.
Door 2. 12% in a diversified miner or an industrial stock.

RMS would need to increase its dividend 400% to meet market demands for better return on investment and compete with inflation.

I am not suggesting RMS increase dividends. I am pointing out a market reality.