By Shane Oliver, Head of Investment Strategy & Chief Economist from Oliver’s Insights, AMP Capital, Edition 30 2015
- A perfect storm of factors led by China worries have caused turmoil in shares.
- Our view remains that what we have seen is likely to be a correction (albeit severe) rather than a new bear market.
- It’s too early to say shares have bottomed but valuations have improved, investor sentiment has quickly become very negative (which is good from a contrarian perspective) and China’s easing move should help if it’s followed up with more easing.
- Investors should allow that: shares often go through rough patches; selling after falls just turns a paper loss into a real loss; market falls throw up opportunities; and dividends remain more attractive and more stable than bank interest.