"The market is always right" is perhaps the most frequently used mantra among investors. It is not surprising, given the humbling experience of getting a market wrong.
However, I would argue the market is generally ‘right’ only in the long term. In the short term the market can be very wrong, often. Examples of the irrational exuberance in the months preceding the sub-prime blow-up and a total capitulation in Q4, 2008 are just two recent examples of a market that got it wrong. There is also a more current example of paradoxical investor behaviour – China. The post sub-prime global market rebound was attributable mainly to two factors – the unprecedented liquidity on the back of the global QE, and the Chinese stimulus package. China continued to pr...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
