Reading the Correction, Following a Game Plan

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Global equity markets have declined meaningfully since their highs near the end of January, leaving many investors concerned. However, the correction is of similar magnitude to other mid-cycle corrections and appears very technical in nature, a reversal of recent strong gains associated with a surge of retail investor inflows into equity markets around the start of the year. Economic and profit fundamentals appear little changed and should ultimately provide support.  We recommend that investors stay with their previous allocation game plan, adjusting by rebalancing gradually as needed.