It has been another tumultuous few weeks on the stockmarkets. The benchmark FTSE 100 index has reached a series of new lows as concern about the banking crisis grows, and investors are questioning the ability of global governments to deal with it. Volatility on Wall Street has hit its highest level for years.
But despite all the doom, some market-watchers believe we have seen the bottom and that now is the time to be bargain-hunting. Renowned fund manager Anthony Bolton, who made his name at the Fidelity Special Situations fund, has started to put his own money into the stockmarket for the first time in two years. James Montier of Société Générale has identified value in large-company shares including BP, Ericsson and Nokia. Investors Chronicle's stock screens, which filter the markets seeking cheap shares, have uncovered plenty of candidates.
For investors prepared to take a long-term view, there are bargains to be had. But there are plenty of reasons to be wary in the short term. Even if the uncertainty around the banking sector is resolved over the next few weeks, investors still have to consider the possibility of the UK going into recession and further hefty falls in the housing market. If you're prepared to take the risk, buying shares now could turn out to be a very profitable venture. But the recovery will be neither quick nor smooth.
I mentioned three weeks ago that US shares traditionally do well over Rosh Hashanah and badly over Yom Kippur. Despite the turmoil, this once again proved to be the case in 2008. Over the two days of Rosh Hashanah, the S&P 500 index rose by almost 5 per cent - although, unusually, it fell in the days preceding the festival. On Yom Kippur, usually a bad day for the markets, the S&P 500 fell by 7.6 per cent.
Oliver Ralph is the editor of the Financial TImes's Investors Chronicle magazine