Woodford says market turbulence reflects 'reality'

"This suggests markets are worrying about growth and is consistent with evidence of a slowing US housing market and slowing US money supply growth, while the global PMI manufacturing survey has been moving consistently lower since April."

Guy Stephens, technical investment director at wealth manager Rowan Dartington, said: "The question is whether this is a time to buy the dips or are we in for more serious falls? Unsurprisingly the crystal ball is clouded.

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"None of the factors at play here are new, and interest rates remain low as is inflation with the US perhaps being an exception. Forward looking economic indicators for most countries are in positive territory although they have been weakening.

"Asia and emerging markets have taken the biggest hits, but on a valuation basis look increasingly attractive. In a similar way, we may see stocks which have been out of favour becoming popular again, a boost for value investors.

"After a long period of strong market growth, it’s normal for consolidation to happen. Although it’s never comfortable, we think this is what we’re seeing. Our expectation is for more volatility, and potentially more falls, but not a bear market. Consequently, we think buying the dips may prove a good strategy, but catching the bottom is nigh on impossible."