But one top hedge fund manager believes that equities could soon be heading for a very sharp rally.
Cazenove's Neil Pegrum -- whose fund made 9.4 percent last year while markets were plummeting -- believes UK equities could soon be enjoying a "March 2003" rally.
While it seems a long time ago now after the market's recent woes, March 2003 marked the start of a 4-year bull market which took the FTSE 100 from less than 3,300 to more than 6,700 and saw clever stockpickers reap huge rewards.
Pegrum argues that stocks are already discounting a lot of bad news. He adds that equities look forwards rather than backwards and therefore, as in March 2003, can rally even as analysts are still downgrading corporate earnings forecasts.
His equity long/short fund's net long position is 14 percent, but he's planning to increase that this year.