Market Talk: Coping with volatility
Duncan Bridgeman and Harbour Asset Management's Shane Solly discuss the movers and shakers in the New Zealand share market on NBR Radio and on demand on MyNBR Radio.
Don’t panic is often cited as the first rule for investors in turbulent times.
Easier said than done but Harbour Asset Management portfolio manager Shane Solly says it’s certainly one rule to keep in mind at the moment.
Increased volatility is probably here to stay, he says, as markets transition from a period of unusually low interest rates globally to more normal levels and China uncertainty remains.
“Unfortunately, equity markets don’t do gradual, they do hard and fast and that’s why we’ve seen this sudden increase in volatility,” Mr Solly says.
“Certainly the timing of the Chinese government devaluing its currency has created a heightened reaction about what that means in terms of contagion to other economies.”
Meanwhile, Mr Solly says there are imbalances in the global economy that haven’t been dealt with since before the global financial crisis. “That’s what Greece just showed us. And certainly, there are excesses in the Chinese economy that are now being adjusted.
“One of the key things is the Federal Reserve is no longer necessary providing a support mechanism … so the free money, that’s becoming more challenging.
“What we are seeing in Australia and New Zealand is some opportunities being thrown up. And I guess that’s the nature of markets, when people get upset and throw things out. That creates opportunities for other people.”
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NBR Radio
Thu, 03 Sep 2015
Thu, 03 Sep 2015
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Market Talk: Coping with volatility
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