Forget Greece: Investors are losing money because of the slowing global economy, an international economic research group has warned.
While the world may be fixated on the fiscal and political challenges confronting Greece and the European Union, it's the $US2 trillion ($2.6 trillion) loss in the market value of China's mainland shares and tumbling sharemarkets around the world that should have investors worried and propel them into action, a report released on Thursday by Societe Generale Cross Asset Research says.
Analyst Andrew Lapthorne said losing money was "inevitable" for investors this year as high asset prices were constrained by weakening economic growth and falling company profits.
Gavekal Capital's Eric Bush warned in late June that more stocks were in a correction than people realised. Photo: Gavekal Capital
"Losing the least amount of money may be the best source of success this year," Mr Lapthorne said. "The slowing global economy is the elephant in the room."
A range of indicators revealed the slowing, he said.
The MSCI World Index has fallen 4 per cent from its 2015 peak. Half of that fall occurred in June.
Global government bonds have endured spates of sell-offs, creating their worst calendar quarter since 2013, when the US Federal Reserve began talk of winding up its quantitative easing measures such as buying bonds, which have propped up the world's biggest economy over the past six years.
"Global equity markets are finally starting to struggle a little in the face of all these mounting risks," Mr Lapthorne said.
"There is also plenty of evidence that insiders are rushing for the exits."
Credit to The Sydney Morning Herald
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