We were very fortunate to have Chris Taylor from Neptune come in to see us at Branksome Park yesterday to provide us with an update on the markets generally and specifically the Japan fund he runs and is a fund that we invest in within our portfolios.
He explained that the rise in China was not based on fundamentals and the market had risen higher than anticipated which has made the contraction at the start of 2016 far worse than it should.
The collapse in Markets during the end of 2015 and the beginning of 2016 is nothing like previous collapses i.e. Aug 2008 when the global banking structure nearly collapsed after Lehman’s was allowed to go “bust”.
Therefor there is no real fundamental reason for the fall but more a case of algorithmic traders causing large volatility in the markets.
China will not suffer the hard economic landing that the scaremongers are predicting but simply revert to a more steady growth.
In essence Chris feels that the recent volatility will subside and markets will see that the “steady” growth of global economies will be seen as a good thing.