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Market Comment - October 07

October 2007

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.

It is a tale of two economies in the UK. Company profits remainhealthy and debt levels are low. Employment is steady, retail sales aresurprisingly robust, though unexciting. In contrast, the news headlinesthrough August and September (peaking with saturation coverage ofNorthern Rock queues, a run on a bank unprecedented since Dickens’lifetime) hinted at Armageddon.Interest rates being too low for too long and a lack of effectiveregulation in key areas encouraged the animal spirits of lenders andindolence of borrowers (and sometimes visa versa), yet the consequencesare containable, as we have said previously. In the US, falling house prices, a trend of quite a few months andincreasing numbers of mortgage defaults from sub- ...

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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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