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Market Comment - January '18

January 2018

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.

“Boom times return for the global economy.” “The global economy has grown strongly in 2017 and will remain strong in 2018.” This is the positive mantra of many analysts and fund managers, who see markets heading even higher in 2018. The problem is the link between economic growth and stock market strength is (counter-intuitively) weak.A light was shone on this recently by new research from Robert Shiller (who is responsible for the cyclically-adjusted price earnings ratio, CAPE). CAPE does not predict bear market – but it provides a reasonably reliable indicator of returns in the 10 years ahead. On this occasion he identified 13 bear markets since 1871, and explored conditions preceding each of them. ...

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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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