The end of the road for the current mid-cap rally

uk equities

The renewed appetite for risk following the war in Iraq and 9/11 has led to a surge in mid caps but it looks as though only quality companies will continue to thrive

Investing is all about risk and return. Much is written on the subject of the potential returns from investing. Erudite studies of economic, demographic or technological developments advertise the potential returns from a wide range of assets, backed up by research on valuations, which support these arguments. These documents often explain the qualitative threats to predictions, but much less attention is paid to the quantitative costs of running these risks in the risk/reward equation. It is like being told the risk of backing a horse is that it will fall, when what you really want to kn...