August proved to be a perfect example of that oft repeated warning included in investment recommendations – “values may fall as well as rise”! Global stocks went on a rollercoaster ride, plunging and climbing from day to day.
It started in Asia (as the Chinese authorities struggled to stop the slide in values triggered by lower than expected growth forecasts) but the ripples fanned out across all of the world’s major equity markets.
Many commentators have long felt that the markets were too buoyant and ripe for a correction and the fall in values last month triggered a wave of investors returning to the markets after a period of inactivity.
We have of course been here before – most recently in the summer of 2011 when everyone was worried about the European debt crisis. Despite the apocalyptic warnings of global meltdown, the markets regained confidence and value over time, pushing the FTSE 100 over the 7100 mark in May 2015.