25th August 2015


In view of the recent volatility within investment markets we want to reassure you not to panic.

The current volatility is a by-product of the falls in the Chinese stock exchange. There are two major factors to remember regarding China;

 Firstly, their economy has slowed. Compared to Western economies, the Chinese are still showing definite growth year on year, however it is no longer the double digit growth as seen previously. This has been enough to cause worries for investors.

Secondly, the Chinese stock market investors are mainly private investors rather than major institutions. As such private investors do not always see the ‘long game’ and can often react emotionally and quickly to news rather than looking at fundamentals.

 It is important to remember that the Chinese economy is still growing and the Chinese government still have a lot of scope to stimulate a market recovery.

The recent falls in stock markets in the UK, US and Europe are directly influenced by the falls in Shanghai, but it is essential that everyone looks beyond the headline grabbing news of the FTSE’s fluctuations;

It is holiday season and huge numbers of institutional fund managers and traders are on holiday. These are the investors who invest over the longer timescale and will see this volatility as an opportunity.

Linked to this the volume of trades being conducted is very small compared to normal. This means that when shares are bought or sold undervalue it has an exaggerated effect on indices.

The knock on effect of the above is that we fully anticipate the markets recovering significantly as we enter September and there will be a return to normality.

For existing clients, it is not the time for rash decisions rather hold firm to a balanced investment approach. Arguably it is an opportunity to invest new monies whilst markets look to be in a short term dip.


 As always we are happy to discuss the situation and potential impact or opportunities with any clients, so please do not hesitate to get in touch.