Although price slumps are undoubtedly painful for countries that are big commodity exporters, as well as for companies involved in the related sectors, we must not forget that for many more people low commodity prices are a direct boon.
This not only applies to countries that are commodity importers, but also to companies that can now use those lower input costs to help support their profits, while consumers all over the world stand to benefit from lower fuel and energy prices, which potentially free up more discretionary spending on other goods and services.
Prudent investors should always be aware of risks, however, and there are factors that require close attention.
Mishandling of the economic situation by governments or central bankers could destabilise a fragile situation.
And the rate of economic growth in China is likely to continue slowing, so any areas that depend upon trade with China will most likely remain vulnerable.
In addition to this, the forthcoming referendum on EU membership in the UK and November’s US Presidential election are both events that could create significant uncertainty, which makes investors nervous.
Despite all of this it is important to remember that, even when the broad economic picture looks mixed, active investors do not invest in “the global economy” or “global stock markets” per se.
In each region and asset class there will be themes, sectors or individual securities that represent relatively attractive investment opportunities; it is the job of active fund managers to uncover them.