Buy
Robin Griffiths, technical strategist at Cazenove
"Historically, investors were wise to sell in May, and buy in late October. In this year’s case, we are waiting to buy emerging markets in the dip, which we expect to bottom out in October.""We expect the likes of Brazil, Russia, China and India to start performing around a year before more developed markets. We have always wanted to buy Asian growth, but have sat tight and waited for the right time to enter the market – come late October, we think the time will come to buy."
Richard Pease, manager of Henderson European Growth
"It’s important not to get caught up in the sentiment whirlpool. Over a three-year investment horizon, I don’t see any way that you won’t make money if you are exposed to the right sort of companies."
"If sentiment improves just a little bit then markets could really take off. This is as good a starting point as we are going to see."
"Companies have fallen but most at the quality end of the market will maintain their dividends. If you are in the right sort of companies now then I think the risk/reward equation is really in your favour."
Amit Lodha, manager of Fidelity Global Focus
"It has been hard to find much comfort in recent events. However, the news is not all bad. Most companies are still very profitable and have strong balance sheets.""We have seen a meaningful reduction in credit card and mortgage delinquency, and consumer debt levels are coming down. It also looks like inflationary pressures are easing a bit, with oil prices for instance retreating somewhat."
"While I remain relatively cautious from a near-term perspective, this increased volatility is creating investment opportunities. Emerging markets such as India and China have fallen a lot, and some stocks are starting to look interesting."
"I have also been taking advantage of recent declines to buy quality companies in developed markets, have products/assets that people need and which have pricing power."
Sell
Chris Bowie, head of credit at Ignis Asset Management
"On paper, price-to-earnings ratios are very attractive in the equity market, but it is important to remember they are cheap for a reason." "The ECB’s buying of around £20bn worth of Italian and Spanish bonds came as a relief to the markets, but they’re going to have to raise several billion pounds more."
"Equities may look good value on a 10-year basis, but it doesn’t look like Europe will get out of this mess for a long while yet."
Bowie’s Ignis Corporate Bond fund is defensively positioned – the vast majority of the portfolio is invested in investment-grade bonds, and it has no direct exposure to the PIIGS (Portugal, Ireland, Italy, Ireland, Greece and Spain.)
Tom Winnifrith, manager of t1ps Smaller Companies Growth
"S&P has come out and said there is a one-in-three chance of another US downgrade; I’d say realistically there is a one-in-one chance.""Though the debt ceiling has been lifted, it will have to be lifted again. America has been living well beyond its means for a long time now, and it continues to even now."
"Within two years, the GDP-to-debt ratio in the US will be the same as where Greece is today. It has to cut its spending, but at the moment it is happy kicking the can down the road. The only problem is that it’s in a cul-de-sac."
Winnifrith sees gold – the ultimate safe haven – as the best place to be invested in at the moment. He believes there is a very real possibility that the precious metal could reach $2,000 a troy ounce by the end of the year. The exception of Winnifrith’s pessimism is gold equities, which he thinks look good value.
Martin Gray, manager of CF Miton Strategic Portfolio
"I was wrong-footed by the effects of quantitative easing on the markets, but [recent data] has made me feel a lot better about being so defensive." "The US job and growth figures seemed to pass everyone by since all the attention has been on avoiding a default, but they were truly awful. UK GDP data has also been disappointing."
"I don’t envisage a crash on the same level as 2008, but as long as the banking system is insolvent, I don’t see any value in risk assets. There is always a risk of severe down-periods when growth is so sluggish."