Key points of this paper:
The fall in share markets over recent weeks reflects increasing worries about US and European growth and concern governments are no longer able to respond.
Shares are cheap, but the risk of a US recession has clearly increased and if one is on the way shares can get a lot cheaper. Short term investors should remain cautious. However, if we are right, and the more likely outcome turns out to be low messy growth but not a return to recession, then current valuations make shares attractive from a long term perspective. Therefore averaging in over time would make sense.
"I have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage." J.S. Mill
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