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The 3 fears sinking global markets: how much reason for worry?

Nothing about the condition of the world economy suggests that a major slowdown or slump will happen, but beware of market expectations and policy errors that can darken economic reality.

While markets are often wrong in predicting economic events, financial expectations can sometimes influence those events. As a result, reality can sometimes be forced to converge towards market expectations, not vice versa. This process is known as "reflexivity".


JANUARY is usually expected to be a good month for stock markets, with new money gushing into investment funds, while tax-related selling abates at the end of the year.

Although the data on investment returns in the United States show that January profits have historically...