Investors show little inclination to trade down and end run

The UK economy is struggling but it is not all bad news in the stock market.

There are companies that are in good shape – and will continue to grow. The good news is that we can pick these up cheap now, before other investors start to pay a premium. The UK market has continued to defy the expectations of the sceptics. Despite murmurings the market has gone ‘too far, too fast’, investors have shown little inclination to trade down and end the run. The drivers of the rally are clear. For one, economic data continues to point to a world in which things are now markedly ‘less bad’ and, in some areas, like the UK housing market, we have even begun to see very tenta...