Last week, China’s stock market drop precipitated a snowball effect, causing a decline in most equity markets worldwide.
This is the second time in 12 months that we have seen a sharp global stock market sell-off after a period of substantial gains over a relatively short period of time. One can assume that more bumpy rides are ahead of us as the US is no longer the only equity market that can lead global markets up or down.
Nevertheless, my view for 2007 has not changed; equities will produce positive returns and significantly outperform bonds.
