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Sentiment, the Eurozone and the markets

How much of on-going Eurozone turbulence is down to sentiment? Every week brings a new crisis, political upheavals, dire warnings and hyperbole from all quarters with the inevitable results on the markets. Political sentiment feeding through to markets in turn feeds through to companies who through no fault on their part can suddenly find their share price falling.

What can investor relations do about this? Clearly one IRO - however dedicated - fighting against panicked market sentiment as a result of a careless comment from a politician is a tough position to be in. Investors naturally consider themselves above emotion and claim to take rational decisions at all times, but people being what they are, everyone is susceptible to sentiment (just consider some of the statements from senior political and economic figures in the Eurozone in recent weeks!). IROs know that in these situations it is important to remind shareholders of business fundamentals.

In a real sense, investor relations is about making sure investors leave sentiment to one side and rationalise their decision making during difficult times!