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Quarterly Newsletter - Winter 2016

TV, radio and the press all tell us that stock markets are having the worst start to a year for 16 years, referring to the year 2000 when the dot-com bubble burst.  This time, however, and ignoring the bubble in the property market, there is no evidence of a bubble as such in the equity markets.  True, valuations have been somewhat stretched for some time, something we have repeatedly said in our previous Quarterly Newsletters.

So what has caused this mayhem in the markets?  This time round, there are several reasons: worries about interest rates going up again after a seven-year hiatus, concerns about the global economy, the dramatic fall in the oil price and, of course, the much talked about slowdown in Chinese GDP growth.  Add to that geopolitical events, particularly in the Middle East and the migration from there and Northern Africa towards Northern Europe, and you can see that all this adds up to a fairly toxic mix of background circumstances.