The long overdue market correction in global equities seems to have finally become a reality. Over the last two days global (and local) sharemarkets have shed about 6%, wiping out all of January’s gains with possibly more short term pain to come over the next week.
However, despite the alarming news headlines, this wasn’t the “worst day on the Dow Jones”, not by a long shot - I think today’s article by Michael Collett explains it best (read here). In percentage terms (which is what really matters) last night’s 1000+ point fall translated into a fall of 4.6% - significant, but not in the Top 25 or worst Dow days. And on average, we usually experience a pull-back of 5% at least three times a year, so we were a little spoiled in 2017.
So as we forward into a more turbulent period, my suggestion would be to not let short-term fluctuations distract or upset you too much (and consider taking advantage of cheaper prices) - market pull-backs are a natural part of the investment landscape.
As always, we'll continue to monitor to the situation and stay close to our clients.