How Should Investors Approach Heightened Market Volatility?
As I have mentioned repeatedly on this blog, we are currently experiencing heightened volatility in the financial markets.
In the realm of behavioural finance, there is a term ‘action bias’ which refers to one’s inclination to do something in times of stress and uncertainty (and there has been a lot of that in the financial markets recently). Some investors may be asking, ‘do we make drastic changes to our investment strategy by moving 100% into cash for fear of losing more?’
Keeping an Eye on China
China is South Africa’s largest single country trading partner. In the past few weeks we have seen significant volatility in the Chinese stock markets as well as a devaluation of their currency. This has impacted on China’s main trading partners as well as emerging market* currencies and equities (shares) in particular.
Don’t Give up on Equities Just Because Interest Rates Are Rising
Investors should not be spooked by a climate of increasing interest rates – shares (equities) remain a good place to be invested, writes Patrick Cairns for Moneyweb. Click here to read the article “Don’t give up on equities just because interest rates are rising”
Rand Blowout ‘unlikely’
The rand fell to levels last seen in 2001 in recent weeks as the slowdown in China and a stronger dollar wreaked havoc among emerging market currencies. This fueled fears that the local currency could plummet to R20 to the greenback. But such a blowout is unlikely, reports Ingé Lamprecht for Moneyweb. Click to read the article “Rand blowout ‘unlikely’ “
A Quick Glance Back at the Second Quarter…
The end of the second quarter (June) proved rather eventful for investors eyeing global markets: heated political arguments around debt repayments in Greece; the U.S. Federal Reserve’s ‘almost confirmation’ of a 2015 interest rate hike and uncertainty over China’s economic outlook dominated the news headlines and fuelled a bearish sentiment.