Opportunity knocks

11th February 2016

Ian Copelin, Investment Director, my wealth comments “Global equities have fallen again this week, with several major markets down around 5% – taking the year-to-date falls to roughly 15-20%.

There hasn’t been a single dominant driver of the recent weakness, but instead it can be attributed to several factors including, continued volatility in the oil price, worries over a slowing Chinese economy and uncertainty over monetary policy (having raised interest rates in December, Janet Yellen, the Fed Chair, yesterday said that, economic uncertainty – predominately in China – could lead the Fed to slow the pace of future rate hikes).

While the current market weakness is uncomfortable, especially given all the sensationally negative media headlines, the current selling appears very indiscriminate.

While the current market environment undoubtedly creates challenges, the fall in oil prices is a huge stimulus for consumers.  And this coupled with a continuation of the current accommodative monetary policies are significant long term positives for equity markets.  While I cannot say when the current volatility will end, I believe it does provide an opportunity to add to your investments as historically some of the biggest rises occur immediately after the biggest falls.”