Update on investment markets

25/11/2011
Provided by Mercer. The information in this article does not necessarily reflect the views of the Trustee.

Concerns over the European debt crisis and slow economic growth in the US have lead to yet another spike in market volatility over the past few days.

A package of reforms announced in late October 2011 provided an initial boost to investor confidence. However, the momentum was soon lost and markets have become increasingly worried about the willingness or ability of Europeans leaders to address their collective debt situation.

Meanwhile, US markets are concerned that political issues will cloud the need for further reform, resulting in additional credit rating cuts and a long period of poor economic performance.

About four months ago, as the world experienced the fiercest volatility seen since the Global Financial Crisis (GFC), our outlook was for "a slow and grinding recovery". We also noted the potential for "a more adverse outcome'', depending on how government policymakers do (or fail to do)."

The underlying drivers of this current volatility remain the same - the European debt situation and problems in the US. As we have indicated previously this volatility is not going to disappear overnight. Debt remains high, the political will to resolve the debt issue is still unclear and the economic growth outlook is very subdued.

We understand that during turbulent phases in the investment cycle even the most confident of investors will experience moments of worry. If you're unsure about your investment strategy – or if you have questions or concerns – please call the helpline.

This information has been prepared by Mercer Outsourcing (Australia) Pty Ltd (MOAPL) ABN 83 068 908 912, Australian Financial Services Licence #411980. Any advice contained in this document is of a general nature only, and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this document, you need to take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering, and seek professional advice from a licensed, or appropriately authorised, financial adviser if you are unsure of what action to take. "MERCER" is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917. Copyright 2012 Mercer LLC. All rights reserved.
 

SA Metropolitan Fire Service Superannuation Pty Ltd ACN 068 821 750 as Trustee for the SA Metropolitan Fire Service Superannuation Scheme ABN 99 439 309 855.

This website is provided by Mercer Outsourcing (Australia) Pty Ltd (MOAPL) ABN 83 068 908 912, Australian Financial Services Licence #411980. The Trustee pays a fee for the provision of this service, however this fee is not conditional on you using this service or acting on the information or advice provided through this service.