A Special Message from Matthew Scholten - MARKET VOLATILITY

I wanted to take this opportunity to write to you in relation to the volatility and declines we have seen in equity markets over recent days.

It has certainly been very volatile with the US market gyrating wildly overnight. That said, the US market closed off its lows of the day and US equity futures point to higher market tonight. Locally our market fell yesterday and more falls are likely today.

So what does this mean for you and your portfolio? And what is behind this sudden period of extreme volatility?

Global share markets have been relatively stable over recent months and US indices have been at record highs at times during 2015. The catalyst for this selloff and volatility have been concerns about the state of the Chinese economy. Investors have been concerned what a slowing in Chinese growth means for the global economy and company profits (which ultimately are the drivers of share prices over the medium to long term). Some analysts also felt the US market was at least fully valued and could retract on negative news.

Our market here has not experienced the gains that we have seen elsewhere in the world however no market is immune from what happens globally and obviously we have fallen in recent days. With commodity prices falling further and our banks somewhat out of favour our market is under added pressure.

However, it is not all doom and gloom – far from it. As in any market environment there are positives. We are now unlikely to see higher interest rates – both here and in the US in the short term. The oil price has declined significantly which is a positive for the economy and gives consumers more spending power. Shares now represent better value and a more attractive entry point for those sitting in cash.

For our clients that have exposure to share markets it is important to remember that we are focused on quality investments to meet your objectives over the long term. This doesn’t change even when markets react irrationally. However, I understand totally that you may be concerned and I urge you to contact myself or any of our team to discuss what is occurring and whether there is a need for any action.

Matthew Scholten
Executive Director
Scholten Collins McKissock

Elector Pty Ltd atf Scholten Collins McKissock Trust, trading as Scholten Collins McKissock are Authorised Representatives of Godfrey Pembroke Limited ABN 23 002 336 254, an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies.

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax and/or legal advice prior to acting on this information. The material contained in this newsletter is based on information received in good faith from sources within the market, and on our understanding of legislation and Government press releases at the date of publication, which are believed to be reliable and accurate. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this email.