Market View:The current crisis offers investors a chance to pick up bargains, writes Michael McCabe.

Our Celtic Tiger has been shot, stuffed and mounted on the wall. Grim headlines are the order of the day.

Our property market is stalling, our stock market has been in freefall and we're all expecting a belt-tightening Budget. Suddenly we're a has-been economy, a bubble that simply had to pop. But haven't we seen this before and didn't we not only survive but prosper?

Our own stock market may be down by about 30 per cent year-to-date but elsewhere the news has not been nearly as bad.

The global stock market has had three significant downward moves this year.

In February/March it fell by 6 per cent, in August it fell by 11 per cent and this month it is down by 9 per cent. However year-to-date it is still ahead by 3 per cent or so.

Of course those figures are in local currency terms so they mask the damage wrought by a stronger euro. It looks as if a typical Irish pension fund might be down about 5 per cent year to date. Granted we may not have seen the bottom of the markets in this cycle because there is a great deal of uncertainty over near-term economic prospects.

The major concern is with the potential economic spill-over from the still unfolding US subprime collapse which, because of securitisation and globalisation, has had ramifications all over the world. This is a serious problem, but weren't the US Savings & Loans crisis, the 1987 stock market crash, the Gulf War stock market collapse and the bursting of the TMT bubble also serious crises? We will always face crises but those crises are not terminal. With the right policy responses from central banks, crises can be managed and overcome. At this point there is no reason to doubt that a few interest rate cuts won't address this subprime crisis.

From an investment perspective, perhaps the hardest thing to do is to invest when sentiment is as poor as it is currently. But poor sentiment corresponds to lower prices and availing of lower prices is key to longer-term investment success. The current crisis is presenting investors with an opportunity to pick up bargains. A strategy of steadily nibbling at those bargains is likely to be very rewarding on a two-to-three-year view.

Michael McCabe is head of portfolio specialists with Bank of Ireland Asset Management