• Economists revised global growth forecasts lower.

• Concerns over interbank lending and a proposed financial transaction tax hit the Financial sector.

• Government bond markets and gold benefitted from a flight to ‘safe-haven’ assets, with gold having now risen for seven straight weeks, its longest run of gains since April 2007.

• S&P 500 fell to their biggest four-week loss since March 2009, but now yields more than 10 Year US Treasuries, only the second time that this has occurred since the 1950’s.

• A recommended offer for Autonomy, the UK software provider, at a 75% premium to the previous day’s price, underlined the substantial amounts of cash around that could be used for M&A.

Markets are likely to remain turbulent until either economic data improves or decisive action is taken by politicians/central bankers. At the end of the day we face one question. Is the world going into recession? The simple answer is we don’t know, but US and European policy errors of recent months have increased the chances.

Last week a number of big global research houses cut their global GDP growth forecasts but did not make recession their ‘base case’ due to the decline in the oil price, the expectation that central banks will lend additional support and the fact that companies are sitting on piles of cash. Instead they are forecasting very sluggish, sub-trend growth in developed economies.

What does this all add up to? We need to find companies that can grow in a challenging environment, but can weather recessionary conditions should they arise. We are therefore focusing on businesses with high after- market sales (maintenance/servicing), order visibility (long term order books), beneficiaries of outsourcing (companies reducing costs), barriers to entry (pricing power and high profit margins), legislation drivers (governments say you must do it), and strong cash flow (to fund growth and pay dividends). This won’t make us immune from current turbulence but should help cushion any blows while positioning us for the long term if, hopefully, the politicians get their act together.

As Bob Dylan sang ‘Times they are a changin’.