Most investors will be thoroughly glad to see the back of October 2008. Global market falls experienced last month rivalled those of 1987 and 1998 and following on from a less than auspicious September.What differentiated this time from previous falls was the eye-watering volatility and that there was nowhere to hide. Asset classes which had traditionally been seen as 'safe havens' or uncorrelated to equity markets were swept down along with everything else.At times, these moves looked like capitulation as investors scrabbled for the exit. Although hedge fund de-leveraging has been the main culprit as these funds have been hit with waves of redemptions, many longer term investors also threw in the towel. Although all markets have been hit, emerging markets were treated much more savagely. We believe unjustifiably.While there are countries which will suffer from the global market slowdown, many are much better positioned than their developed market equivalents - this differs from 1998. Unlike previously, many emerging market countries have strong foreign exchange reserves, positive GDP growth, relatively benign inflation and accommodating governments. Whether or not the developed world heads into recession, this is unlikely to be repeated in emerging markets.Unlike early 2007 where value was difficult to identify, there are bargains galore in the investment trust sector assuming one takes a longer term view and is contrarian by nature.
