With the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) ending last week down 1.8%, the index has now racked up falls of 3.3% for the month.
Significantly, this is the fourth weekly fall in a row.
It wouldn't be surprising if some investors are starting to get nervous that the long awaited correction is underway – that's the wrong track to take however.
The best investors will try to remain emotionally detached from the market's movements and instead focus on assessing all opportunities based on their discount or premium compared to fair value.
By focusing on value rather than market noise, investors can make gains in rising, falling and sideways markets. For example, last week AWE Limited (ASX: AWE) and Premier Investments Limited (ASX: PMV) gained 13.9% and 10.4% respectively.
In both cases, the companies provided positive announcements to investors – a situation which can occur in any market hence the need to focus on value.
In AWE's case, the oil and gas explorer announced what could be the largest conventional onshore gas discovery in Western Australia since the 1960s.
Meanwhile, stationary and apparel retailer Premier announced a strong set of full year results which showed sales growth of 4.7% on a like-for-like basis and underlying earnings growth of 10.9% to $92.8 million.
The fact that companies can achieve double-digit gains during a week that the index is falling is a reminder that investors should tune out to volatility and focus on underlying business fundamentals
It should also be a reminder that volatility can create opportunities.
During the week blue-chip stock AGL Energy Ltd (ASX: AGK) hit a new 52-week low, as I previously noted, AGL could be an opportunity for income-seeking investors.
Other stocks to hit new yearly lows included Fortescue Metals Group Limited (ASX: FMG), Aurizon Holdings Ltd (ASX: AZJ), Seven Group Holdings Ltd (ASX: SVW) and JB Hi-Fi Limited (ASX: JBH).
All five of the above stocks are leaders in their respective industries and operate appealing assets; they are certainly all facing headwinds which means their share prices might not be racing higher off their lows in a hurry. However they could all be worth closer inspection by long-term investors who are seeking to purchase stocks at prices below fair value.
