Norton Global Asset Management’s senior analyst said “We believe it’s too early to start panicking, even with the acute corrections we’ve seen in markets during the last few weeks. A positive example is the US equity market which has just been on a near record bull run without a 10% correction, it’s not all doom and gloom as the press will have you believe”.
Of course the main headlines recently have been the Chinese economy, which has been fraying investor’s nerves. These Worries are genuine but there are other factors to consider also. There has been talk of a repeat of 2013’s ‘taper tantrum’ and the belt tightening of the US monetary policy has also been an issue over the last few months, again, fraying investors nerves.
However, Norton Global believe the major concern for investors should be the impact that some emerging markets economies may have. Some believe the commodities cycle is looking likely to be a long term bear market, Norton Global say its best not coming to any definitive conclusions just yet with the markets in such a volatile state and many predicting a major crash.
The FTSE All World Index is experiencing a low it has not seen for nearly two years mainly due to equities trading in developed markets with over-priced and expanded valuations.
Many developed countries are still showing signs of solidity with corporate earnings remaining stable. There are a couple of places that are buck the trend with Japan and Europe being the noticeable ones. The US however paints a less noticeable picture. Often when commodities prices are lower there is a hike in earnings because of reduced costs.
Norton Global Asset Management predicted at the start of the year that it may well be a bumpy road we are travelling on in 2015. Norton Global advised its clients at the start of the year that they expected to see a period of higher risk and lower returns and discussed and in some cases adjusted their clients risk profile to one where they were comfortable.