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Market correction shakes investors' confidence in 'buy the dip' mantra

A majority of investors said the global economy was in the "late cycle," the highest level since January 2008

Samie Modak  |  Mumbai 

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Stock brokers reacts as they watch the share prices of BSE sensex in Mumbai. Photo: Kamlesh Pednekar

The latest stock has increased investors’ anxiety and shaken their confidence in the ‘buy the dip’ mantra, according to a latest survey of fund managers by The survey showed a spike in the number of who indicated that they had taken against a sharp fall in equity over the next three months. Also, fund managers were seen reducing risk by moving out of equities.

The average cash balance with global rose 4.7 per cent in February from 4.4 per cent in the previous month. Allocation to equities declined to 43 per cent from 55 per cent in January—the largest one-month decline in two years. A majority of said the global economy was in the “late cycle,” the highest level since January 2008. Only five per cent of fund managers surveyed said global interest rates would be lower in the next year, while 80 per cent said interest would rise. “While this month’s survey showed that were holding on to more cash and allocating less to equities, neither trait moved the needle enough for an all clear to buy the dip,” said Michael Hartnett, chief investment strategist.

First Published: Thu, February 15 2018. 00:47 IST
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