While the threats of high inflation, ongoing credit risk in Europe and the end of quantitative easing in the US seem to be looming over the markets, some industry professionals argue that the current dip could present compelling opportunities.
"The big question at the moment is whether the correction we are seeing is a classic May pullback, or whether it is the beginning of a more serious sell-off similar to the one we saw last summer, when markets fell more than 15 per cent from peak to trough on fears of a double-dip recession," said Robinson, chief executive of Schroders Private Banking.
"We think the answer is the former as profit growth remains robust and valuations are attractive. However, in the short-term there are numerous headwinds that could cause markets to fall further," he explained.
The comments follow a significant slump in commodity prices this month as wary investors sold out of the asset class. The surprise drop has given rise to fears that equity markets as a whole could face significant headwinds.
Performance of indices over 1-yr
Source: Financial Express Analytics
"The impending end of QE2, Japan falling back into recession and monetary tightening in China fuelling fears of a hard landing are all casting shadows over investor confidence," continued Robinson.
"With Italy being threatened with a downgrade and Greece heading dangerously towards default, the spotlight is firmly back on the sovereign debt crisis in Europe."
However, Robinson believes that twitchy investors should not act too hastily because falling markets present their own compelling opportunities.
"Investors should keep their powder dry for now and wait for buying opportunities when markets have corrected further," he explained.
"These days markets price in risk aversion much more quickly than they used to, and a level of between 5,500 and 5,700 on the FTSE 100 would be a good entry point."
"On a longer-term basis, we still like Asian markets, but, as with the FTSE, would advise clients to be patient."
"If one feels compelled to put money to work now, we favour large cap high quality global companies that are paying dividend yields over and above what one can receive on a 10-year government bond."
Natasha Jhunjhunwala, vice president of EFS origination at Barclays Capital, says she has seen a lot of appetite for trading volatility in gold and other commodities.
She believes crises such as the collapse of Lehman Brothers have created a market for speculators to play equity market volatility via products such as Barclays Volatility iPath Exchange-Traded Notes.
"With so many contributing factors to volatility, people have been concerned that markets have been so calm," explained Jhunjhunwala.
"With concerns about European debt restructuring, inflationary pressures and ongoing tensions in the Middle East and North Africa, many investors feel there is not enough risk priced into the market."