Buy and sell or hide and hold – Navigating volatile markets

With global markets beginning this week in the same unpredictable vein as they finished the last, two stockpickers debate whether it is time to buy or hide and hold.

Buy and sell or hide and hold - Navigating volatile markets


It has been a trying couple of months for stockpickers.

All over the world, margheritas were left to evaporate as fund managers abandoned their beach mats and rushed back to their desks in time to witness the fallout from the Black Monday equities rout.

While some order has been restored, markets are still decidedly unpredictable – the FTSE 100, having yo-yo’d between 5,898 and 6,247 points during the past month, jumped 63 points in morning trading on 21 September – and there is no telling which way they will go next.

Tim Crockford, co-manager of the Hermes Sourcecap Europe ex-UK Fund, said: “For us, the biggest surprise of the summer sell-off was the extent to which the market was caught off guard by China’s currency devaluation, which served as an admission that all was not fine.”

Simon Edelsten, manager of the Artemis Global Select Fund, believes that markets overreacted to both sides of the Shanghai Composite’s rapid rise and even faster fall.

“We have had worries over China over the past few years, but the fear tends to boil over,” he said. “While Chinese growth is not what it was 10 years ago, it is still growing alright, and the summer was a funny period. We will wait and see what happens, but the statistics are not all that bad.”

But should investors be trying to ride the waves of volatility, or sticking close to the shore until the swell dies down?