Stronger US$ causing market volatility

FINANCIAL markets have experienced a tremendous increase in volatility in recent weeks. While this is clearly worrying for investors, I do not believe it's a serious cause for concern.

In particular, the growth prospects for the US economy have not changed, and it has been market confidence in the US recovery that has really underpinned the five-year bull market in equities. I think that this bull market is still intact and the present weakness offers investors the opportunity to get on-board at attractive valuations.

Sharp and quickly escalating volatility of the kind we have seen in financial markets can be unnerving for investors. Yet while the tendency to do as others are doing can be a strong one, this is not the time to follow the herd and reduce equity allocations.