What can go right?

Last week we put the case why a slow-steam-ahead global and local economic growth phase looks set to persist for some time and why investors in all asset classes need to prepare for further volatility in returns... The local share market seems to have reflected our outlook in spades over the past week to the point where it is reasonable to question whether the market has pushed down too far. On a price basis, the ASX 200 is down in Australian dollar terms by 9.1% since end-December 2014 and by 18% since its most recent peak in April. As the Australian dollar has also fallen substantially over the same period the decline in the ASX 200 for US dollar-based investors is 23.6% year-to-date and nearly 30% since the peak in April. Given the size of the falls in the local share market, especially in US dollar terms, it would not take much of an improvement in the global and local economic outlook to trigger a substantial round of bargain hunting. The issue is what can go right? (VIEW LINK)