What is happening?
Global share markets have been very volatile over the last couple of days. The U.S. market in particular experienced a significant fall on Monday 5 February 2018, back to levels we were seeing in December 2017. Other markets were also affected, but to a lesser degree in many instances.
Following the fall on Monday, some markets such as the U.S. have rallied back with the Dow Jones Industrial index up 2.3% for the day (their close on Tuesday) which is the largest daily increase in two years.
Why is this happening?
Share markets move up and down for a range of reasons. For example, fears over the interest rates, which have been pushing higher in recent times, may have contributed to the current volatility. Global share markets have also experienced a very long period of unbroken growth, so a correction is not unexpected.
What does it mean for you?
It’s important to remember that volatility is simply part of share markets. At ANZ Investments we remain focused on long term goals rather than short-term ‘noise’. With global economies continuing to perform well, we believe the fundamentals for good share market performance remain in place. It’s also important to remember that our funds are carefully diversified to help manage volatility. For example, bond markets have risen in response to the sell-off in share markets, which has provided positive returns from that asset class to funds.
We believe that maintaining good investment disciplines and staying focused on long-term goals is more important than ever in times of volatility.
Published February 2018