Relief rally' as risk of meltdown transfers over to governments

With the financial panic over, we have seen a ‘relief rally' in stock markets as the risk of financial meltdown has been transferred to governments via rescue packages.

But problems still remain – economic recovery could be slow and drawn out. As a result, the outlook for European firms remains difficult and corporate earnings growth will be scarce. This type of challenging environment calls for investing in companies able to grow their earnings, even in difficult conditions. There will likely be further pressure on pricing, margins and profits, and as a result, finding companies able to grow will become increasingly difficult. With credit still difficult to obtain in the current circumstances, investing in lowly-leveraged businesses with sufficient fun...