Rate hike tantrum will pass as 'lower for longer' still holds sway

AS asset prices plummet, bullish sentiment has seeped out of emerging markets altogether, and is wavering in developed markets.

Despite poor sentiment, investors should note how the "lower for longer" mantra is still in play in financial markets, as supportive central banks keep bond yields low and indirectly boost stock prices in anticipation of a recovery. The year 2015 is not the same as the year 1997 or 2008, and this rate hike tantrum, too, will pass.

Fearing a recession, investors have rushed back into safe havens. The US 10-year yield fell below 2 per cent on Monday, a sharp move from a peak of 2.5 per cent a few months ago. With interest rates likely to stay low for some time, along with cheap oil and commodities, lower costs for businesses and an easier time at refinancing debt should result in higher profits - should there be growth.