Talking via video link at the Edinburgh Investment Trust annual general meeting, Woodford, head of equities at Invesco Perpetual, claimed that the outlook is likely to get worse before it gets better. "I think the environment at the moment is quite risky," he said. "The accumulation of weak economic data and downgrades across the world in terms of GDP is likely to be reflected in downgrades to profits and earnings. I think we are already seeing that."
"So stand by for more profit warnings. They are coming thick and fast. There is risk at the moment."
"I struggle to see how the market can make much headway, but within the market there is a lot of opportunity."
Woodford maintains that companies with defensive earnings, particularly in the pharmaceuticals sector, remain a source of great optimism.
Last year the manager said that firms such as GlaxoSmithKline and AstraZeneca represent the investment opportunity of a generation. Despite the challenges facing the global economy, he remains upbeat on companies such as these.
"I still believe that there is a lot of valuation opportunity," he explained.
"I have said consistently that despite these difficult economic times, there is a population of stocks that can grow consistently through this difficult period."
Woodford added: "Those companies that feature prominently in the portfolio are the businesses that can deliver revenue, cash flow, earnings and dividend growth consistently going forward."
Data from FE Analytics shows that the Edinburgh Investment Trust has been one of the top performers in its sector over the past decade.
Returns of 158.21 per cent over 10 years put it well ahead of the 110.44 per cent returned by the FTSE All Share index. Woodford only took over the trust in September 2008.
In the open-ended space, his £9bn Invesco Perpetual Income and £11.7bn High Income portfolios remain among the most popular funds in the retail market.
Performance of funds vs index and sector over 10-yrs
Source: FE Analytics
Our data shows that they have returned 181.25 per cent and 186.72 per cent respectively over the last 10 years.
The manager is convinced that regardless of what happens in the eurozone, there will be opportunities for equity investors; however, he believes the lack of certainty makes the region a tricky proposition.
"My view is that the underlying weakness of continental Europe is likely to get worse," he explained.
"The reason it is getting worse is that we have a combination of monetary and fiscal headwinds, which are getting harder, not weaker."
"It is hard to see how the eurozone crisis will be resolved. You have to attach some probability to a eurozone breakup."
"You also have to attach some probability to a move to more integration. But either way it is likely to coincide with poor economic performance."
He concluded: "It is possible for high quality businesses with consistent growth to break free from a more difficult market backdrop."
"There have been plenty of examples of that through the course of my career and I think we will see the same going forward. That is why my strategy remains unchanged."