Frustratingly, investors have had to endure another period of weakness and exaggerated price volatility in share markets. This makes life uncomfortable for our clients especially as memories of the financial crisis remain so vivid. However, it is important to recognise that bad news about company performance was not the reason for the decline in markets. Generally speaking the corporate sector is in very good shape, with healthy balance sheets and strong profitability.
It can be easy to pay limited attention to medium-term fundamentals and instead be distracted by what they fear other market participants might choose to do in the short-term. To read about the current investment environment and our advice to long-term investors, read our quarterly CIO letter, update for investors September 2011.