The Great Debate UK

Peering into a murky crystal ball for 2010

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batstone-carr

-Jeremy Batstone-Carr is director of private client research at Charles Stanley. The opinions expressed are his own.-

It’s that time of year again!  The time of year in which the writer’s desk, never a pretty sight at the best of times, becomes clogged with the product of the investment community’s crystal ball gazing.

Needless to say the vast majority is effusive in its enthusiasm for risk assets (turkeys don’t vote for Christmas) and makes an aggressive and fairly convincing case as to why equity markets will never go down again…ever!

However, for the Bob Cratchits of this world (well, our office Christmas party was cancelled) life just isn’t like that.  Most investors have learned the hard way that trees don’t grow up to the sky and share prices can go down as well as up.

Hike in interest rates a step closer

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menashysmall2- Edward Menashy is chief economist at Charles Stanley. The opinions expressed are his own. -

The Monetary Policy Committee of the Bank of England has kept its key lending rate at a record low of 0.5 percent, last reduced in March 2009 when it indicated that conventional policy had reached its limit and unorthodox measures such as quantitative easing were to be used.

Middle-age investment challenge

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Stephen Peters

- Stephen Peters is an investment trust analyst at Charles Stanley, covering all closed-ended investment trusts and companies. The opinions expressed are his own. -

With between 5-25 years to go before one retires, the “middle aged” are in a conundrum at the current point in time. Having seen the value of their assets decline sharply in recent years, dreams of an early end to one’s working life have been put on the back burner for a little while.

Equities may now be a better bet

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menashysmall2- Edward Menashy is chief economist at Charles Stanley. The opinions expressed are his own. -

Not exactly shock and awe as the MPC keeps base rates on hold at 0.5 percent while the most recent financial surveys have been unanimous in expecting a no change decision for some time now. It was always going to be an MPC meeting to discuss whether or not to persevere with quantitative easing. The difficulty for the MPC is that it is too early to judge the effectiveness of the quantitative easing. Clearly the Bank of England would prefer to wait at least until it publishes new quarterly growth and inflation forecasts to explain how it wishes to proceed.

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