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  1. #1

    Are you buying back into shares?

    Last week, while stock markets were falling and every piece of economic data created ‘double dip‘ headlines, we learnt that one of Britain’s most respected fund managers had slashed his fund’s cash holding by more than two thirds.

    Philip Gibbs who runs the Jupiter Financial Opportunities fund with Guy de Blonay, had just over 41% of the fund’s assets in cash in June, but by July the figure had fallen to just 13.65%. The cash has been used to increase the fund’s exposure to all geographic regions, particularly Europe and the UK, but not North America. Gibbs has also moved out of the safe haven of gold in another of his funds. You can get more detail here:

    In fact, after five months in which fund managers reduced their allocation to shares, a Reuters poll of 11 big investors published today showed a marked move into these riskier assets.

    The message? Fears of a return to recession may be overblown and UK companies with overseas earnings can make a mint.

    Reuters’ Chris Vellacott quoted Andrew Milligan, head of global strategy at Standard Life Investments: ‘Concerns about a double-dip recession are certainly overblown. Too few investors look at economic history. In reality such events are really rather rare, especially once a private sector recovery has begun.’

    While Alec Letchfield, chief investment officer for wealth at HSBC Global Asset Management, told the newswire: ‘In terms of positioning in the UK equity market, we would stress that thanks to the globally diversified nature of the UK equity market, only about a third of market-wide earnings come from the UK economy.’

  2. #2
    Meanwhile, you have the likes of Albert Edwards warning that investors – at least those in the US – are in for a 'rude shock'.

    This leads to numerous questions for the smaller investor – if you have been sitting on the sidelines, is now the time to sell down that cash pile and move more of your money into shares? Or are you wary of the opinions of financial experts and will steer well clear thank-you-very-much?

  3. #3
    The answer to the question is that nobody knows. For every well reasoned opinion there is an equal and opposite one. What is very clear is that there are more people holding a dismal outlook than a positive one. As always, this could generate a self fulfilling prophesy as experts talk down any possible recovery. Then there is no confidence and the recovery is postponed.

  4. #4
    When we begin to measure every country and region of the world in terms of annual profit and loss, based on import/export costs on some form of internationally agreed criteria we might be able to assess real performance more readily. At the moment differing accountancy standards and reliability of individual countries standards of honesty e.g Greece, serve to muddy the waters and obscure valid reasons relative performance of individual currencies. Ratings by Standard and Poor and the like have shown themseves to be little more than guesswork. It is time investors were provided with more reliable information and countries as well as companies were fined for missleading statistics. The fine pool could finance recompense for missleading investors

  5. #5
    I have been buying since February 2009. I have had to sweat it out since March of this year but feel I made the right choice to ignore the negative nonsense endlessly being pumped out by the Financial media notably the Pink paper, CNBC and Bloomberg. Earnings have by far exceeded expectations, Company managements have shown again and again that they recognised what they were up against and took the action(s) necessary to bolster profitability in a difficult trading environment. Why oh why do we pay so much attention to the talking heads whose sole objective is to drive more and money into bonds. We are heading for a monumental blow out as the herds keep being driven into the barn. Who is going to shout "fire" I wonder? I look at the performance of my managed pension and cannot but wonder why I am paying somebody to mis-manage my money so badly. I am glad I ignored the barage of mis in formation and took matters in my own hands. There will be no double dip despite the bond market's best efforts to try and convince anyone prepared to listen. The good news? Interest rates are likely to remain low for the foreseeable future making equities all the more attractive, particularly those that continue to pay dividends year in year out. When the banks say they are going back into the black and builders say they have already sold a substantial portion of next year's order book, have dramatically reduced gearing and are happy to resume paying a dividend why should we pay attention to the muppets who are merely talking their book(s)

  6. #6
    I find one satisfactory way of knowing how well a share is performing is to watch it for a few weeks. A gradual and steady rise is a sign that it is doing well. Providing all the other points are satisfactory, I invest. No one knows for certain, but itīs one way of knowing whether to invest or not.

  7. #7
    My gut feeling: it's too early to buy as stocks are heading a lot lower. I'm not worried about double dip in US or Europe debt problems (worrisom as they are). My main worry is China, on which so much hope in pinned at the moment. I'm not worried about growth rates coming down to 7 or 8 or even 5%. My fear is that the officials are fiddling with the statistics and hiding problems such as double digit inflation and over-capacity. From what I hear things are quite bad on the ground...wages are not rising enough to keep up with inflation, and the reports of domestic consumption are widely exaggerated. When you hear Chinese workers committing suicide to demand higher wages, you know things are not as rosy as government statistics have you believe.

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