Sell-offs are painful, but they can also let a good deal of hot air out of the market. Brave, long-term investors may well argue that valuations of all manner of assets now look more palatable than they did half a year ago, from tech stocks to government bonds. It's something of a reset for those with time to ride out volatility.
That’s of little comfort to those who bought in at peak valuations last year. It’s also worth noting that buyers of 'hotter' and potentially more speculative investments may have been burned. Think crypto, special purpose acquisition companies (Spacs) and the craze for meme stocks, to name a few.
Many companies that floated on the stock market in the past year or so are also underwater for now, spelling bad news for investors keen to back the hottest new trend. But if we take a look at the investment trust space, the focus of recent launches has protected many shareholders so far.