Since the current global bull market began during the first quarter of 2009 there has been a constant debate between bulls and bears about whether the markets are being driven by strengthening fundamentals or driven by free and abundant liquidity provided by central banks led by the US Federal Reserve. We have maintained a consistent view that the bull market has been driven by a combination of both liquidity and improving fundamentals. Markets themselves can be swayed by the additional ingredient of investor sentiment and as we know in relatively short time periods, investors can move from unbridled optimism to wholesale pessimism in a herd like manner. At present they appear to be veering towards the pessimistic side.
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