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It's a tough call when meandering markets fail to react to big signals

WE have less than a month to wait to hear the result of a vote that I never thought I would see in my lifetime.

Views are entrenched on both sides. If it is a Yes, things will never be the same again. But enough about the Royal and Ancient voting to allow women members - what else is going on?

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Not a lot. In fact so little that it appears everyone has decided to video themselves having a bucket of iced water flung over their heads. It is a bit like the markets.

It is just over a year since they plummeted because the world-leading economy that is Cyprus had a mini banking crisis.

At the time it was predicted this would be a precursor to the whole of Europe's banks closing their doors on a Friday and once they opened on Monday only letting their customers withdraw enough euros to buy a litre of milk and a baguette.

Of course none of this happened. Indeed the Cypriot economy has made great strides since then.

In contrast to the market mood in March 2013, nowadays it doesn't look like anything can faze them.

We have seen Argentina default on its debts (again), incursions by Russia into the Ukraine and resulting sanctions, the growth of Isis, and the eurozone showing barely any growth at all.

These have been greeted with a big yawn by a market that previously would have dropped 10 per cent on even the threat of such events.

I am not sure if the markets reacting like this is a good or bad thing. They do not appear to be exuberant, indeed they are far from it, so I do not feel that they are in bubble territory, but equally they are not nervous. There are plenty of doomsayers around and most predictions are for a fall, so that is good news as we all know the herd tend to get it wrong.

But what has brought on the sudden change in mood? It could be that there is nowhere else to go. The yield on German bonds is now under one per cent. Even the bonds issued by the Italians (who like Argentina have not been averse to defaulting in the past) are only paying 2.5 per cent, or less than half of what they yielded twelve months ago.

The risky end of the corporate bond market is yielding record low levels.

To be honest, with that background, equities look good value, and that may be the answer. It could just be a case of the market having found a level that it is comfortable with and staying there.

We may have a real balance between investors wanting to buy and those wanting to sell. This doesn't make for a very interesting piece of insight but so­metimes there is no real reason why markets move the way they do.

In many ways it is easier when markets are volatile as you can tell it is a good time to invest when they fall. When they meander as they are at present, and hardly blink when something that we would expect to cause a reaction happens, buying signals are not obvious.

In times like this often the best thing to do is to drip money into the markets over a period of time as doing this means that you will average out any movement we see.

So who knows what the future holds? Not me.

Maybe next year's Open golf champion will walk up the eighteenth fairway at St Andrews and see a woman looking out the window of the R&A clubhouse - and she won't need to have a duster in her hand to be able to do so.

Steven Forbes is the managing director of Alan Steel Asset Management

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