by Peter Lees
16. July 2011 00:04
The summer traditionally brings lower volumes and higher volatility. This year though this is likely to be exaggerated by the on-going European sovereign debt crisis and the ‘risk-on’ ‘risk-off’ trading patterns. But with volatility comes opportunity.
The other big plus for the market at the moment is valuation. At the current stage in the recovery cycle the market’s price earnings ratio should be around 14x but it is actually only at some 10.5x. This means there is the potential from earnings multiple expansion in addition to economic growth, once we have a bit more clarity on the macro environment.
