Market may bottom further
Investors should brace themselves for one more "gut-wrenching" capitulation in equity markets before there is some long-term recovery, according to the chief investment strategist with HFA Holdings, Jonathan Pain.
Pain told the PortfolioConstruction Investment Summit in Sydney today that he believed there would be a recession in every developed country over the next six months, making the next six months ghastly for investors.
However, he said bottom-up equity analysts had finally caught up with the situation and were cutting earning estimates, while capital markets appeared to be returning to some degree of normalcy after what he described as "a glacial thaw".
Pain said it was this factor that represented a ray of home in what was an otherwise very gloomy tunnel.
Another speaker at the summit, the adjunct professor of the School of Finance and Economics at the University of Technology, Sydney, Jack Gray, said one of the problems in the current financial market was the friction between principals and agents.
"There are so many agents in this business and they cannot all be adding value," he said.
Gray said investors should focus on portfolios and not stocks, and focus on valuations within portfolios.
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