Fidelity's McQuaker: Equities rediscover their true nature

Seek areas that have fundamental value

We have seen greater volatility across equity markets over the past few weeks, but in many ways this is healthy and perhaps a more normal pattern of behaviour, writes Bill McQuaker, portfolio manager of the Fidelity Multi Asset Open funds.

However, this 'return to type' also carries important implications for how markets could develop over the next few months. Perhaps most importantly, higher levels of volatility now imply equity valuations should be lower going forward. In other words, the ascent back up is almost certainly going to be slower than the race to the top we saw over the first three weeks or so for January.  Even assuming we immediately revert to the same low volatility environment as before, the action over the past few weeks will not wash out for some time. Funds which allocate to asset classes based o...