"We’re asking ourselves why the market has not corrected further over the last few months. After a remarkable run-up in equities we were hit by a “disastrous” Italian election result (according to The Economist), budget cuts in the US, a potential run on the banks prompted by the Cypriot bail-out and a drab series of economic data stretching from China to the US. Just about every technical and sentiment indicator we subscribe to has been pointing down for a while. The impact on European equities? Down 6% from their recent peak whereas, around this time last year, they fell 21% peak-to-trough on similar sorts of worries. Bluechip US equity indices have barely even registered a decline. Japan is up 27% over the last 3 months."
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Chris Darbyshire, Chief Investment Officer, Seven Investment Management