By David Walker Now is the time to buy growth shares, when US investor sentiment is "at an absolu...
By David Walker
Now is the time to buy growth shares, when US investor sentiment is "at an absolute low point", says a wealth management expert.
Harry Morgan of Edinburgh Fund Managers' private client division, said the US slowdown had wiped about $72 trillion off the value of the Nasdaq market, but "when sentiment in the US is at such a low point it is the time to buy growth shares".
Morgan's view was shared by market strategists at Schroder Salomon Smith Barney last week.
Strategists from the global asset management and stockbroking house said last week that with the techMARK 100 Index down 17% this year and the FTSE 100 down 15% since the start of 2000 it was "difficult to be bearish from here", according to a report from Bloomberg.
Analysts said the UK's stockmarket had hardly ever looked cheaper when compared with bond investments over the past 35 years, and the analysts said they considered shares in tech, telecoms and media stocks to be fair value in comparison with bonds at present.
In a bold statement, the Schroder Salomon Smith Barney analysts said the FTSE 100 blue-chip index could rise by as much as 33% this calendar year.
Despite the global jitters in share price since last April's crash on Nasdaq, Edinburgh Fund Managers' Morgan said American share buyers had not retreated to the relative safety of cash and bonds when the markets turned south, but "rather they ran for the comfort of old economy stocks".
Morgan said the global consensus growth rates of between 3.5% and 2.5% were being "clawed back", but he said in technical terms shares were "looking quite attractive".
"The market is far cheaper than it was in 1998. We are relatively attractive in shares in terms of price to book and price to earnings ratios, and for international investors the UK market looks very attractive, and we may attract some investors from overseas. It only takes a few foreign investors to push the market along," Morgan said.
But Morgan cautioned investors who felt that foreign traders might move in on the UK's technology and telecoms stocks.
"I am not so convinced as those who see these sectors as must buys, as I suspect there is still a bit more to go with Vodafone and the tech stocks falling."