Investors look set for more uncertainty after the markets react to the new government’s first 100 days in power.
According to The Share Centre investors should remain cautious, stating that “one thing guaranteed is the continued volatility of an uncertain stock market.”
The comments suggest that the UK economy has still not fully reacted to the Emergency Budget cuts and that there may be more doom and gloom to come.
The news echoes experts fears that soaring inflation and low interest rates may result in a double dip recession.
Sheridan Admans, Investment adviser at The Share Centre said: “As the fallout of the cuts become visible, not only to companies, but also the businesses and consumers they depend upon. Though there will certainly be opportunity for a quick buck to be made, there will also be challenges ahead. We are advising existing and would-be investors to research carefully to avoid being caught out.”
Their report recommends that investors should focus on emerging markets in order to avoid any uncertainties that may lie ahead at home.
Given the uncertainty over how to achieve growth, we currently prefer companies with a growing percentage of their earnings coming from overseas operations, particularly those in emerging markets, such as Vodafone, GlaxoSmithKline, BHP Billiton, Tesco, Arm Holdings and Barclays Bank,” she added.
“One threat to this is the fight among nations to have the weakest currency in order to aid export driven growth, which could result in markets getting more volatile before settling into more normalised conditions.”
Although they recommend keeping an eye on Britain’s High Street banks as an investment potential, suggesting they may see ‘some favorable activity in the next 12 months following the recent profit results from taxpayer backed Lloyds and Royal Bank of Scotland.
© Fair Investment Company Ltd