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Market Comment - August

August 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.

Last week was the strongest one for equities in three years. Newsreports tell us that the market has been buoyed by comments from theFed chairman, Ben Bernanke, hinting that the peak in interest rates isclose at hand, with further support from encouraging corporateresults.  Let’s look at these in turn.Research from investment analyst Ned Davis in the US highlights thatsince 1913, when the US Federal Reserve came into being, in the 12months following the peak in interest rates, average stockmarketreturns have been negative. That makes sense. They stop raisinginterest rates because it is anticipated that the economy will slow andthe stockmarket in turn begins to discount the fall in profits byfalling away. So the peak in inte ...

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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.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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