Schroders Equity Lens August 2024: your go-to guide to global equity markets
The data to help keep a calm head in a crisis
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Summary:
Stock markets fell sharply in early August, especially Japan, but many have rebounded, and all are still up for the year (slide 5)
This is not unusual. 10%+ falls happen in more years than not, and 20% falls happen once every four years, on average (slide 6)
Equities are also more volatile than other asset classes (slide 7) but the reward has been better odds of beating inflation (slide 8) and stronger long-term returns (slide 12)
Being spooked by high volatility or market declines could be detrimental to your wealth. Staying invested has led to better outcomes (slides 9-11).
The market reaction has been overblown. Near term US recession risks are low and companies are still beating revenue and earnings expectations (slides 13 and 14)
But a positive side-effect is that the correction has taken the froth out of markets, cheapened valuations, and improves the outlook for returns (slides 15 and 16).
To capture recent market moves, all market levels and valuations have been updated to 7 August 2024 unless stated otherwise, rather than our usual month-end figures
Chart of the month:
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