Stock Market Recovery?

I have recently been attending various seminars run by some of the best fund managers in the country.These include Sanjeev Shah (Fidelity Special Situations Fund) Tom Dobell (M&G Recovery Fund) and David Jane (M&G Cautious Multi Asset Fund) to name but a few.

They have all confirmed my thoughts that the recent improvement seen in the markets is likely to be a bear market rally as opposed to a recovery in shares that will be long lasting.

What I mean by a “bear market recovery” is that conditions are still not great and this pick up in stock values is probably based on perceptions that the markets may have hit the bottom and hence the only way is up!! Therefore it is not necessarily based on core value to be had.

We could well see a correction in the next few weeks. Any pick up in performance is in my opinion likely to take some time and will not be rapid.

I do however believe that we are potentially at / or very near to the bottom of the markets. Financial Stocks may well see a more sustained improvement despite their recent problems as they have been hit particularly hard by recent events.

It is important to note  that you cannot guarantee where the bottom of any bear market will be, but my opinion is that if you are looking to invest for the medium to long term, ie 5 to 10 years, then now could well be a good time to invest. Never forget, however investment of any form comes at a risk