Buxton: Reasons to be fearful?

Old Mutual Global Investors' Richard Buxton has highlighted a series of global shocks which could hit equity markets over the next few months as investors return from their seasonal breaks.

Buxton, running the Old Mutual UK Alpha Fund, acknowledged there are a number of potential headwinds for markets in the run-up to Christmas, including tapering in the US, weak growth rates globally, and even the Ebola outbreak which could spark a flight to safety. "No one thinks equities are cheap," he said. "Cheap relative to other asset classes, or fair value, is the most supporters are prepared to claim, whilst for the bears valuations are already extremely expensive, riding on a tide of central bank liquidity far removed from the reality of sluggish global growth, pedestrian profits ...