Henderson has stated that equities are still not expensive despite an equity market 'bull run' lasting three years. Yet the FTSE 100 has taken five years to get back to the 6000 level, and is still 13% below its peak more than 5 years ago. They believe that the markets have improved this year, supported by good economic news and ongoing merger and acquisition activity. They have predicted that returns on equities 'look average at best this year' with a forecast of 5% in the UK over the year to March 2007.
Our view
Buy low - sell high. When you see headlines that FTSE has hit a new high we believe this is the time to sell not buy. Do not be greedy and 'catch a cold'. If you wanted to invest in Equities this should have been done a few years ago.