Perhaps the world’s stock markets will merely slow down rather than suffer a glaring correction. That may be overly optimistic, but looking at the total returns for regions across the globe raises the prospect that a soft landing for equities is a possibility. One reason to think that a kinder, gentler correction may be in the offing is that liquidity is still high and there’s an abundance of committed investing shops looking for bargains.
The combined assets in mutual funds, ETFs and hedge funds have never been greater. Such capital may be flighty when it comes to any particular corner of the securities markets or countries. But portfolios jammed with cash looking for a home aren’t going anywhere, at least not any time soon. The explosion in professional investment management in all its various guises means that there’s always of hungry investors. That may prove ill-advised in time, but the trend has been decades in the making and it won’t evaporate over the next week, month or even year.