Friday 17th August 2007
A long-term approach to investments can weather turbulent stock market conditions, it has been advised.
Investment firm Edward Jones suggests that the market continues to grow over extended periods of time.
Returns on investments over the next 12 years are likely to reach about six per cent annually, according to the company.
However, short-term drops in profitability are "an unpleasant reminder that stock market volatility is a normal part of the investing process".
The comments follow the revelation that the All Share Index has dropped by about ten per cent since mid-July.
This could have a knock-on effect on the rest of the economy, F&C Investments warns.
UK Growth & Income Fund manager Ted Scott predicts that spending could drop as consumers look to save more in the wake of the stock market fall.
"Given the record levels of indebtedness, consumers will now wish to rebuild their savings, particularly if unemployment starts to rise," he states.
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