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Market Comment

April 2006

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

We have covered the lack of exuberance in the UK stockmarket inrecent issues. So although such a long period (3 years) without atleast a 10% correction is unprecedented since the 1950s and suggests wemust be close to the point of such a correction, we should not expectany to be too severe (so nearer 10% than 25%). The FTSE-100 index, nowclinging to 6,000, is still less than 10% above the 200 day movingaverage and we shouldn’t be unduly concerned until this gap is at least15%. Since 2003, strong support has been found at the 200 day movingaverage, currently at 5,500, though more obvious support exists at5,150, nearly 15% below the index at 6,000.Valuations for the UK stockmarket also highlight fair value. Thoughthe index is up 80 ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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