Thursday 8th March 2007
The outlook for UK equities remains positive despite the recent slump in the UK market, new research from Scottish Widows Investment Partnership (SWIP) suggests.
The stock market correction has seen equity prices fall significantly, but according to SWIP they are still strong compared with gilts and equities in other countries.
It says the turbulence experienced in the past few weeks is simply short-term market volatility and it expects the UK equities market to perform in line with company profit growth this year, with gains of around five to eight per cent.
Robert Waugh, head of UK Equities, at SWIP, said: "Although the underlying sentiment behind this apparent change in investor mood may lead to further falls in share prices, it has not fundamentally changed our view of the market.
"The level of dividend growth has generally exceeded expectations, which from a market perspective is healthy," he added.
SWIPs view, that the recent falls in equity prices are no cause for concern, is echoed by other stock market professionals. They claim the drops are healthy and that investors should not sell.
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