We are experiencing rather annoying volatility mainly in the wrong direction….but is this based on something systemic or rather an over reaction to noise?

According to Russell Investments, the fundamentals of our market and those of the developed world are still OK.  With Europe down 15% since their high in April, our own market down a similar amount and the US down 6.3% for the month, it is certainly a valid question.

There will be those that are linking it to the Shemitah and who knows if there is a statistical link here…but we prefer to focus on the provable stuff.  (if you dont know what Shemitah is, then paste into YouTube for plenty of content)

For example, employment, wages growth and the actual profitability of a company plus their continued ability to deliver profits for shareholders – either as cash dividends or reinvested within their enterprises and thus gain a return on investment that feeds back into profits.

There are always plenty of reasons to sell and investment and fewer to buy when the market goes down significantly…human behaviour is just that, human.   So having an objective look at the underlying companies and asking the question around their particular profitability and forecasts, makes more sense than following a herd or a belief.

For those that are jittery and still in profit within investments, taking out some of that profit is not a bad option….but better to be a buyer than seller when things go down…

Have you heard of dollar cost averaging?  Where you sell or buy over  a period of time and thus “average” the price.  If you need to get out of the market and your view is that it may or may not go down further in the short term, then selling over time would make sense.   Likewise, if you are wanting to buy into the market and feel that the price could go up or down, then buying over a period of time is clearly a more sensible thing to do.

What to do now?   call me or email me to discuss your personal situation and I can recommend a strategy.

If you just want some re-assurance then have a read of Russell Investments market insight published today (24th Aug 2015) at

http://www.russell.com/au/insights/library/articles.aspx?id=Update–Global-market-volatility-20150824&_cldee=c3RldmVAZnA0bGlmZS5jb20%3d

Good luck and watch this space!