Anybody who has been inclined to watch the markets over the last few weeks will have seen some classic roller-coaster patterns developing. Depending on which parts of the media you have read or listened to, you would be forgiven for wondering whether anyone actually knows what’s going on!
With the benefit of hindsight, it is relatively easy to see what is happened. The so-called Sub-Prime lending problem in theUShas served as a reminder to the relatively small proportion of borrowers and lenders in the Ninja (No Income, Jobs or Assets) market that if it seems too good to be true, then it probably is. The resulting impact on the American banking system has then filtered through into the wider market.
It is also a reminder that we live in a “global economy”. More to the point, it means that investors need to have a wide diversity of assets – not just asset classes such as defensive or growth oriented assets, but also those that are affected and can benefit from geographically different economies.
The investment team at Fiducia have been keeping the developments in the market under close review. It would be a brave man indeed to predict where the markets are going over the next few weeks, but most indicators suggest that although more short term volatility can be expected, the medium to longer term prospects look good.
We select funds that we consider to be the “best of the best”, where we expect the individual managers to see the opportunities for growth in the recent market correction. As a result, our portfolios have faired well because of the wide diversification of funds and we continue to monitor the performance of the managers and their funds.