Should You Pull Out?

Don’t let the recent global equity markets volatility make you pull out of stock market. Current market weakness is an overdue corrective process and investors should not react to short-term events. The following points suggest that there is no change in the global economic outlook and we are just going through an adjustment period. Consider these points:

• Global fundamental economic outlook hasn’t changed and global growth still remains strong.

• Global stock valuations look quite reasonable by historical standards.

• Corporate balance sheets look strong with robust cash flow

• Growth momentum has remained strong in the emerging markets; Europe, Japan and China have shown impressive growth.

• Global recession looks very unlikely at this point.

I think the best course of action to take in a volatile market is to do nothing. Volatile market gives an opportunity to buy investment products at lower prices. Individual investors should stick to long-term investment objectives and a well-diversified portfolio always helps you to ride out the market’s turmoil.