Writing for Firstlinks, Munro Partners’ CIO Nick Griffin, examines whether we’ve yet hit the bottom of the market.

The rapid increases in global interest rates this year came as a shock to many investors. While the interest rate setting for the world was way too low last year, it was also completely understandable. It seems nobody, including central banks, had anticipated how quickly economies would recover from Covid-19.

But once they did, spending rose and demand, combined with tightening supply for many goods, pushed prices up and necessitated the rapid increases in rates.

The good news is that we believe markets have now fully priced in interest rate hikes. The bad news is the majority of earnings downgrades are probably yet to come.

As investors we need to respect the history of bear markets – and the history of bear markets is they are normally worse than this. But there are still opportunities in this environment if you know where to look and we have been deploying cash even as we wait for earnings downgrades to play through.

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