Stock investors brace for volatile end to 2014
Global investors are starting to cut back on stock market positions, wary of a wave of financial market turbulence in the final quarter of this year as the era of cheap money ends.
Global investors are starting to cut back on stock market positions, wary of a wave of financial market turbulence in the final quarter of this year as the era of cheap money ends.
The tide turned abruptly this week with the close of the third quarter and major stock markets have lurched down at the start of October, a month associated with previous market shakeouts including the 1929 and 1987 crashes.
Two weeks earlier, the benchmark S&P 500 Index reached an all-time high, prompting many investors to speculate that shares were too expensive by most historical measures. Since reaching that peak on September 19, Wall Street has dropped nearly 4 per cent and many expect more volatility to come.
“The last three years have been quite good for equities but now it’s going be a lot harder. Unfortunately you’ve now got to invest with seat-belts on ... You have to accept more volatility. We expect the next six months to be very challenging,” said Remi Ajewole, a multi-asset fund manager at Schroders, one of Europe’s largest independent investment groups.
You have to accept more volatility. We expect the next six months to be very challenging
Markets are starting to price in the US Federal Reserve calling time on the easy money policies which it brought in as economic life support after the financial crisis of 2008.