Investments News

Investors 'must review portfolios' - 19/07/2007

Excellent! Very Good Good Fair Poor

Why not be the first to rate this article?

The trend in rising share prices is likely to continue, but volatility within the market is likely to increase in the future a market strategist suggests.

Dr Kate Warne from Edward Jones explained that recent profit warnings from a number of UK listed companies should not deter individual investors, but they should review their portfolios and look at where their money is held as share prices can change quickly and it is prudent to be prepared for all types of market.

She stressed that it is hard to predict declines in share prices, with investors advised to own quality shares and diversify their holdings.

Dr Warne explained: "Corporate earnings growth in the UK has been above average over the past few years and in general companies are indicating earnings are still growing, albeit at a slower pace. This suggests the trend in rising share prices should continue, but we expect volatility is likely to increase in the market."

As the chance of poor performance increases, risk in portfolios can be reduced by getting out of investments such as high-yield bonds and emerging markets, or by diversifying using gilts, investment grade corporate bonds or mutual funds.

Although UK markets appear relatively strong at present, share prices could suffer if earnings growth slows more than anticipated.

© Adfero

Back to Index