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Seven reasons why you shouldn’t hit the panic button

Sure, the first half of this week has seen the Australian share market described as a “bloodbath”. But now’s not a good time to panic. Here’s why.

The US Dow Jones might have suffered its biggest dive in history, and the Australian stock market got a little sucked down with it as a result, but this isn’t a sinking of Titanic proportions.

In fact, ASX figures show that Tuesday was just the 23rd largest percentage decline since 2008, when the GFC hit.

So while big names such as Macquarie Group, Westpac, Commonwealth Bank, ANZ and Telstra (to name but a few) all took a hit of more than 3%, here’s what economists and market analysts have to say about the state of the market:

1. Michael Heffernan, former Chief Economist and Lawyer with the ASX:

“Smart people will see these declines as perhaps opportunities to invest.”

“There is no reason for (the Australian market) to fall, at all, but we do and that’s what the market does and there will probably be a shake-out for a few days.”

2. Ric Spooner, Chief Market Analyst at CMC Markets:

“The size of the movements on the Australian share market over the past two days have been a bloodbath, there’s no doubt about that, but at the end of the day it has only taken the market back to where it was in October.”

3. John Sevior, famous Australian stock picker:

“I love these days. Because generally we’re a buyer and we’ve been patiently waiting for opportunities. We try and wait for days where we can get the right companies at decent prices.”

4. Sarah Hunter, Head of Australia Macroeconomics at BIS Oxford Economics:

“The growth outlook for the global economy is still good with positive momentum in most economies, and although there will be volatile days in the markets, over the course of this year we still expect equities to track higher.”

5. Jacob Deppe, Head of Trading at online trading platform Infinox:

“While the fall in global equity markets looks dramatic, it is no more dramatic than the record rises we have seen since the end of November. For that reason alone many would argue a correction was on the cards.”

6. James Carlisle, Research Director at Intelligent Investor:

“Over the past two trading days, our market is down about 5%, but that just takes Australian share prices back to where they were in October.”

“Active investors should be combing their watch lists, looking for stocks whose prices provide a decent margin of safety compared to their views of their value.”

7. Shane Oliver, chief economist at AMP Capital:

“The pullback in the direction-setting US share market should be limited in depth and duration to a correction and we remain of the view that returns from shares will be positive this year.”

Still not convinced?

No worries, we completely understand that market turmoil is hard to ignore. So if you’d like some extra reassurance, feel free to give us a call on (03) 8609 9226.

We can walk through your strategy with you once more to ensure you’re still getting a good night’s sleep each night – and not checking overseas stock markets at 3am on your smartphone.

 

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.