Keeping a rational head in an irrational market – by Elliot Farley of T Bailey

When reflecting on market movements over the last few weeks, writes Elliott Farley (left) of Nottingham based fund manage T Bailey, it is important for investors to understand that a fundamental principle of investing is that markets don’t always act rationally. Sometimes they get things wrong; usually they overreact in the short-term. Often this is a good thing when managing a portfolio. Ultimately markets are self-correcting in the longer-term. As a result windows of opportunity open for the astute manager to sell when they feel assets are overpriced and buy when they feel assets are underpriced. One of the advantages ...