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Investors cautioned on short-term outlook for equities

By Staff Reporter
  • September 03 2015
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Invest

Investors cautioned on short-term outlook for equities

By Staff Reporter
September 03 2015

Investors should hold off on any moves in the equity market for the next few months, with the recent volatility set to continue, according to Instreet Investments.

short term outlook equities

Investors cautioned on short-term outlook for equities

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By Staff Reporter
  • September 03 2015
  • Share

Investors should hold off on any moves in the equity market for the next few months, with the recent volatility set to continue, according to Instreet Investments.

short term outlook equities

Managing director of Instreet Investments George Lucas said the aggressive sell-off in equities across the globe, spurred by fears about a slowing Chinese economy, was compounded by uncertainty around the US Federal Reserve's next interest rate move.

“SMSFs should be cautious, just until the volatility washes out of the market,” said Mr Lucas.

“I don’t know whether [SMSF investors] should liquidate but they should definitely be cautious about putting new money in.”

Mr Lucas said, however, that talk about economic fallout from the slump in Chinese equities has been overdone

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“Investors are confusing the selling off of shares on the Chinese share market with China’s real economy where the economic data does show slower growth, but it is not weak enough to justify the fears of recent times,” he said.

Hints that the Fed may raise the interest rate in September have also rattled equity markets, he said.

“The market is still predicting that there is a chance of a September move, with two weeks of economic data to analyse; however, [with] the recent panic, and a fall in core inflation, the case appears to be weaker than two weeks ago,” Mr Lucas said.

“The Catch 22 is that uncertainty around the Fed’s decision is adding to the volatility in the market which could delay the decision.”

The recent volatility is a “new normal that investors should be ready for”, he added.

Investors cautioned on short-term outlook for equities
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