Markets tends to view the quiet summer months as a period of reflection prior to a more active autumn but, warns David Jane, the lack of liquidity means it can also be a risky time for unwary investors
Markets have very much gone to sleep for the summer, with trading light and many participants on holiday. This quiet time is seen as a period of reflection prior to a more active autumn period. It can also be a risky period given the lack of liquidity. If important events occur during the summer's thin markets, price movements can be exacerbated. This was seen last December - markets took an especially savage hit when interest-rate disappointment coincided with reduced liquidity during the Christmas season. This summer there are a number of foreseeable risks, as well as the ever-prese...
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