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Market Comment - May

May 2005

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.

How quickly sentiment can change. Only last month we reported the record low in the FTSE small cap dividend yield, and record low spreadsin bonds, each highlighting a lack of risk aversion. Now there are growing concerns about the global slowdown (which we highlighted in ourJanuary issue as a certainty), and high yield bonds are under severe pressure as concerns grow over credit worthiness in a slowdown – these concerns preceded the news of the last couple of days that General Motors and Ford bonds have been downgraded to junk status, because of anxieties about the survival strategies of these massive global concerns. Can stockmarket indices make progress in thisenvironment? Are these concerns just bricks in the "wall of worry ...

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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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