Every day above ground and vertical is a good day.

Posted on 14 September 2015 by Douglas Chadwick

The last month has given cause for a number of people to consider putting Isaac Newton`s “Theory of Gravitation” to the test. The media and the newspapers have been piling on the grief about peoples` failing pensions and investments caused by the collapsing markets in the recent “Black Monday” event. They are laying the blame for this mainly at the door of China`s falling GDP, this due to a reducing world demand for manufactured goods, which has then resulted in collapsing mining company valuations as commodity prices have tumbled. All of this and more is certainly true, but is the fall even across the UK stock market indices and when did it actually start to happen? The FTSE100 and FTSE350 actually peaked at the end of April, and the FTSE250 a little later at the beginning of June. I have looked at how they have performed from their highs earlier in the year, until the Friday before “Black Monday” the 24th August, and then how they looked at the end of the day Looking at these numbers it is obvious that the much quoted FTSE 100 had started its fall long before “Black Monday” and this fall was not evenly spread amongst the other two indices. There has been a silent crash taking place since the beginning of May with the smaller company markets being less affected. In fact the FTSE 250 has fared significantly better and we know from the Saltydog numbers that many small company funds were making reasonable returns during this time. When this particular correction is completed, will we see these smaller market indices recover sooner and rise more sharply than the more heavily laden FTSE 100? Who today knows that, and only time and an examination of the numbers will reveal whether this takes place. Until then it is only a hypothesis. It is always worth making sure that you fully understand the situation in which you are operating. Do not just accept the media take on events. I am reminded of the story about an aging couple who were considering marriage. They discussed various matters like finance and location. Eventually the old gent asked the lady how she felt about sex. She replied that she liked it infrequently. After a pause he enquired, was that one word or two.