-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.

Market forecast

According to consensus expectations, UK corporate profits are expected to increase by about 34 percent over 2010 and by 16 percent in 2011.  In part, this profit surge is down to many UK quoted companies’ exposure to the still-fast growing Asian and, selectively, emerging market economies.  The earnings improvement is likely to be influenced by cost cutting and further working capital improvements.