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By Richard Hunter, Hargreaves Lansdown

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As the "£77 billion wiped from share prices" headlines become today's chip paper, market participants can now look at the current situation in the cold light of day.

There is little question that the volatility in the markets which has become all too common in recent months is set to continue. Uncertainty has long been an enemy of markets in general and this was replaced earlier in the week by something resembling the fear end of the spectrum.

In addition, the spectre of the fallout from the US sub-prime market remains, and until such time as the full and final losses can be quantified once and for all, the market will show little sympathy for further surprises.

With this in mind, the impending final results season from the UK banks will take on more significance than usual. Analysts will be scrutinising both the figures and the comments from the company for indications of any further writedowns resulting from sub-prime exposure. In some ways, it is an opportunity for the UK banks to reassure the market (as they did to some extent with their trading updates in late summer) but at the same time they will not be given the benefit of the doubt in the light of any weakness whatsoever.

However, the word recession is the one which is, above all, the one on the market's lips, even if the severity of Monday's falls was surprising. After all, the threat of recession in the US has been the subject of much debate over the last six to nine months and, even now, market professionals and economists in the US are split between whether the US is heading towards recession - or whether they have already arrived.

The subsequent strain this would put on the global economy is one which the market has chosen to focus on at the current time. There is a school of thought that the worst price scenario has already been factored in to share prices, although this is a dangerous call if the recession should lead to a prolonged bear market - in which case the current market levels may have further to fall.

The extraordinary decision of the US Federal Reserve to cut interest rates outside of the Fed's planned meeting next week - and by a whopping 75 basis points - was an early reaction to the fact that the US market had been closed on Monday and, in particular, as a warning shot to those commentators who were suggesting that the Fed's indecision to date may have resulted in a recession becoming unavoidable.

This action will, of course, give a short term boost to share prices, even if it seems to limit further proactive measures in the months ahead - although an immediate rumour in the US markets is suggesting a further quarter of a per cent cut at the Fed meeting next week, which would reduce rates in the US to 3.25%. It is, nonetheless, a clear indication of intent from the US government to stem the current despondency which is enveloping markets.

In terms of the UK market and, of course, the UK investor, most seem to have avoided rushing for the exits by selling shares and crystallising losses which were, at least, only on paper before the decision to sell. There are many investment adages which spring to mind in parlous times such as these, and one which seems particularly pertinent at the moment is that it is the time in the market which is important, and not timing the market.

In other words, investing is a long term strategy and should usually be taken over a timeframe of anything between five and ten years. As such, the fluctuations and corrections that have been seen over the last few days need to be taken in context with the longer term picture.