MARKET TALK: Reality bites for investors

Investors have been overly complacent. With special audio feature.

The tumultuous start to the new year may have caught some investors napping and, if people weren’t nervous before, they have reason to be now, considering the dynamics pulling on the market.

“Markets have had several very strong years of growth and it did look as if people were a little bit complacent and that things were looking a little bit overdone in terms of markets having been priced fairly highly,” Craigs Investment Partners head of private wealth Mark Lister told NBR Radio’s Andrew Patterson.

“So I’m not surprised that we’ve seen some volatility. But certainly I’m surprised by just how sharp it’s been and just how quickly we’ve seen things pull back in some regions.”

Wild swings in trading on Wall Street yesterday saw headlines like “From Horrible to Just bad” as the Dow plunged 550 points but then recovered to be down 250.

There are two camps: those who believe the story is just beginning and those who believe the global economy is not as bad as the markets portray.

“I think it reflects a lot of things – it reflects complacency on the back of last year, the US Federal Reserve changing tack and starting to tighten, still a lot of uncertainty and risk in China, and oil has obviously been a huge part of this – how far and how quickly prices have fallen,” Mr Lister says.

“Everyone underestimated that one.”

Meanwhile, in light of the falling oil price, Market Talk panelists discuss how energy companies Z Energy and NZ Refining are faring. And we take a look at Sky City Entertainment following its profit upgrade earlier this week.

Tune into the NBR Radio special audio feature for the full interview.

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