Investment Focus - A Time To Invest|
by Peter Cherry
Although there would seem to be no definitive end to the
war in Iraq, in other words, we doubt that a Peace Treaty
or Surrender will be signed, the defensive positions
adopted by the markets should be jettisoned. Investors
have perhaps focused too heavily on what is really a minor
skirmish (when compared to, say, Vietnam) in the Middle
East as being the reason that markets have been in the
doldrums recently. There are much more major problems
facing both industry and nations around the world, but, for
many people there is at least some good news for once and
that should send investors back to the marketplace.
So, is it a good time to buy? The short answer is a
definitive Yes, though with a word of caution. Immediate
economic and earnings outlook is fairly weak though beneath
the surface there are positive signs. We should expect
some sort of sustained rally in the short to medium future
though this could be followed by a continuation of the bear
market. In essence, make hay whilst the sun shines, but
be prepared to adopt a change of strategy at some point in
We can also expect a flow of cash towards the US Dollar and
a realisation that post-war booms are not uncommon.
Having said that, realise that the periods after WW1 and
WW2 required the rebuilding of several huge nations, not
just one medium sized one.
So far as alternative strategies go there are a number of
areas that we currently like. These include Emerging
Market Debt, China and Eastern European equities and hedge
funds (such as the Man Ip Arbitrage Strategies that has
given consistently good results and substantial returns).
We also favour commercial and residential income property
funds in the United Kingdom and Europe.
Our forecasters predict an upside for most of the major
indices and Latin America, Israel, Software, Telecomms &
Communications sectors, construction engineering, biotech
and financials. Notable downside predictions include
Korea, Poland, South Africa, airlines, tobacco, and auto
InvestmentWarehouse.Com has a strategy for both adventurous
and cautious investors who require value for money through
discounted charges and a huge range of funds from which to
choose. So long as the investor defines the amount of
risk versus reward that they require this is a pretty good
time to get back into the market. Stocks are relatively
low in value and the management teams that lead unit trusts
and mutual funds are 'lean and mean'. Poorer managers who
cannot deliver have been squeezed out, a
financial 'survival of the fittest' if you will. Although
there are pundits who have not yet called the bottom of the
market it is often the better strategy to climb in and
await takeoff that to try to grab onto the tail-plane half
way down the runway. A kind of aeronautical 'don't miss
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