While short-term risks in global markets feel higher, longer-term there are good reasons to be somewhat more confident.

The recent sharp falls in Chinese shares arguably tells us more about regulatory issues and fears around the share market and currency in China rather than much about the economy.

A U.S. recession is unlikely; the combination of good US and euro zone indicators lately indicate the global economy is unlikely to plunge into recession. Lower oil prices and commodity prices are providing a boost to consumers and many businesses. Monetary policy remains ultra-easy.

Short sharp falls in early 2016 have seen share market valuations become a little more attractive. Apart from the US, central banks look likely to continue to support markets with easy monetary policies through the first part of 2016. Inflation is virtually non-existent, so interest rates need not rise in the short term. This scenario still supports a constructive case for buying selected equities, at least until interest rates begin to rise to make bonds more attractive. In fact, in the first three weeks of March, markets have been much more positive. This is a welcome development.

However, a diversified approach to investment, as always, remains appropriate. Moreover, as all share markets have risen strongly over the last few years, we encourage investors to reflect upon their portfolios which may have drifted away from their benchmark ratios due to the exceptionally strong share returns of recent years.

If you have any questions or concerns about what is happening in the market please get in touch with us.