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Market Comment - June '08

June 2008

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

There have been five major recessions since the First World War, not a huge sample, but it is nonetheless instructive to consider common causative features, and how these reflect on the current period. These periods were 1920-21, 1929-32, 1973-75, 1979-82, and 1989-93. The element of shock (a random external event) laid on top of inherent vulnerability has often been a key feature.The 1920-1 downturn occurred when a post-war boom was stopped abruptly by Government spending being cut sharply, and interest rates spiking upwards. The fragile mood of the time rapidly moved from optimism to pessimism. The rest of the decade was marked by relatively slow growth and high interest rates, certainly compared to the US, and the stock market ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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