Advisers call for calm

The Fry Group is calming investor jitters against a backdrop of concerns over the Eurozone debt crisis and the strength of the US economic recovery by stating there is no need to “panic”.

These advisers say their conviction remains that, “Western economies will have to monetise their debt (ie, continue to print money) to get out of this slump and, in the end, that will result in a rise in inflation.  Over the medium to long term, set against that backdrop, the fundamental appeal of real assets such as equities remains apparent.  However, effective stock and asset selection is key to navigating an upward path through these volatile times and anyone in trackers where stock selection or diversified asset allocation is not an option is likely to be in for a bumpy ride over the short term.”

In the meantime, comfort may be drawn from the good news that in the majority of cases, a correction doesn’t turn into a bear market.

Birinyi Associates points out, “Since 1962, there have been 25 corrections greater than 10% during bull markets. Nine of these instances became bear markets.

Historically there is a 64% probability that this is only a correction and not the start of a bear market.”

This company also reminds investors, “The average correction is 13.2% and lasts 118 days. If this market follows the pattern of the average correction, the FTSE100 will bottom at 5,268 on the 25th of August.” A date for the calendar, perhaps?

http:www.thefrygroup.co.uk

http:www.birinyi.com