Seven reasons not to be too concerned

The weakness seen so far this year started with declines in the Chinese share market and currency, sparking renewed concerns about the Chinese economy, not helped by some soft manufacturing data in the US and geopolitical concerns in the Middle East and around North Korea. There could still be more share market weakness to come in the short term: global growth worries centred on China and the US may linger, until the Fed starts to soften its stance on interest rate hikes market nervousness is likely to remain. While risks remain high in the short term there are several reasons not to be too concerned. If we do go into a bear market in developed market shares it is likely to be relatively shallow. Importantly, a US recession is unlikely. This is critically important as the US share market sets the direction for global shares and the historical experience tells us that slumps in US shares tend to be shallower and/or shorter when there is no US recession and deeper and longer when there is. See the full list: (VIEW LINK).