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Market Comment - July

July 2002

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.

The footsie cracked in the second week of June and challenged the levels we would expect to provide support.  In fact footsie went to the next layer of support at just under 4,500.  Anyone that continues to declare themselves optimistic is regarded as certifiable.  Yet it is obviously logical that the lower the Market goes, the more optimistic we should become, as we are necessarily nearer the bottom. But investor psychology doesn't work like that. Is the bear market over?  We don't know – noone does.  We do know that markets over react.  Many of uswere starting to become cautious on stockmarkets as far back as 1995,and there was the famous "irrational exuberance" lecture from AlanGreenspan.&nbs ...

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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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