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Blue-chip shares less risky during 'tough economy'

15 January 2008 / by None
Blue-chip shares tend to be less affected by economy volatility making them a good investment possibility, F&C Asset Management has said.

While the firm acknowledges that there is likely to be a gloomy year ahead, it noted that there may be some respite as blue-chip shares tend to do well during a financial crisis.

Jason Hollands, head of group communications at F&C Asset Management, said: "There is a potential upside in very volatile, cautious markets. Blue-chip shares tend to do well; we have seen in recent months that smaller companies and mid-caps which have done well in recent years, have been hit."

He added that smaller companies feel more pressure as they tend to rely on bank borrowing as opposed to larger global companies who suffer less.

Elsewhere, F&C have stated that the Taiwan elections could be a major turning point for the country which has previously been hindered in global markets.

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