The Market Wrap 19-1-15

By Jason Fittler

You have to hand it to the Swiss they know how to make a splash.

Their announcement on Friday, to stop supporting their franc, took the wind out of the markets sails.

We also have China announcing reduced growth and suspending margin lending from its two major banks. This has pushed world markets down.

Stability is what every investor wants. A nice linear increase in their portfolio. No surprises.

But, if this were the case you would never make any money. 

The volatility in the markets has increased over the past week and I expect to see more over the coming months.

The world is paying the piper for over spending and borrowing. The question is who will stay and who will go.

The volatility will weed out the high-risk players.  The Swiss have done this by not supporting the franc.

Some hedged fund and exchange traders have already declared their hand and are winding up.

But more to the point what do we do? 

With this volatility in Europe, I see an opportunity to pick up some US and Europe Exchange Traded Funds (ETFs).

This region will in the coming years put in some great returns.

The trick is not to go to heavy too fast and be comfortable with the short-term volatility.