If you're still invested in the market, congratulations are in order.
Given the fortnight that we've had, there'd be plenty of investors out there who have thought about taking all their cash off the table to escape the volatility of the market lately.
In fact, since the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) closed at 5686 points on 24 June 2015, the market has shifted upwards or downwards by more than 1% on eight occasions. That's out of a possible 11 times, during which the market has actually fallen by 2% or more twice. Now that is volatility.
Grexit
The problem is there isn't just one issue playing on the minds of investors. First, it was Greece and the supposed 'crisis' that could occur should it default on its loans. Indeed, Greece already has defaulted on the loan and could be set to leave the Eurozone in the near future.
As it turns out, no one is even too sure what that could mean for the global economy, let alone Australia's economy. Glenn Stevens, the chair of the Reserve Bank of Australia, has already stated that the direct impact on Australia would be minimal, although we could be indirectly hit should the default create a contagion effect throughout the European economy.
Indeed, the market is still wary of a potential 'Grexit', but it's two problems much closer to home that are really bothering investors now.
China's 1929
China's sharemarket has been stuck in a severe downtrend, losing more than 20% in the last month in what the Fairfax press referred to as "China's 1929", referring to the crash known as the Great Depression in the United States.
It's finally managed to regain some composure over the last two days thanks to extreme measures undertaken by the Chinese government, but whether these measures can hold the market at bay over the next six months or beyond remains to be seen.
Notably, the Shanghai market is still hovering considerably higher than it was at this time last year, but confidence has taken a battering. The real fear is that the meltdown will spill-over into China's real economy which could be felt around the globe – particularly in Australia given our close trade relations.
Iron Ore
That's brought about the next big issue on the market's mind. Iron ore. The commodity endured a 32% plunge over a 10-day stretch which saw it hit a record low of just US$44.59 a tonne on Wednesday, down 10.1% for the session according to the Metal Bulletin.
However, iron ore bulls shouldn't get too excited. The commodity is still expected to trend lower over the coming weeks and months, and even years, as supply continues to heavily outweigh demand. The iron ore sector is not where investors want to have their money right now.
The week that was
All in all, the ASX 200 has finished the week only marginally lower. Nonetheless, investors will be glad to put last week in the rear-view mirror as they assess their losses and contemplate what could happen next.
The fact is, no one knows with any certainty what will happen next, which is why the market has been so volatile. Investors hate uncertainty and that's exactly what they're facing from a number of different angles right now.
While some investors will no doubt look to take their money off the table and retreat to 'safer' alternatives such as gold, bonds or term deposits, the smart investors will take the weekend to explore the various opportunities presenting themselves right now, whilst also making sure they're prepared for what could be another volatile few weeks ahead.
