The FTSE 100 entered an official bull market last week with a rise of more than 20 per cent from its lows in March, and global equities surged on hopes the worst of the recession is over.
But here’s the curious thing. The majority of independent financial advisers say the green shoots of recovery are nothing more than hot air and recent stock market gains are simply a bear market rally. And so do most of the private investors they advise, according to a survey by 1st- The Exchange, a technology provider for financial services firms.
The findings show little return of confidence among private investors who are still wary of current market conditions. The strong market performance can be attributed to the reallocation of money into equities from other asset classes, driven mostly by institutional investors. “With private investors still nervous there isn’t new money bolstering the market but just existing money being reallocated, says Paul Yates at 1st-The Exchange.
Yes there are sightings of green shoots but, er, when will they grow? Only a quarter of IFAs think we will see any growth this year. Others are not expecting a bull market run until next spring or even for another 18 months.
Back to the potting shed in the meantime.