Identifying underpricedstocks is key to success

In the current downturn, investors should seek out those stocks that are at the bottom of their cycle because they are likely to offer strong growth potential in the long run

Want to offer a risk free, tax-free 8.1% return to your clients? No problem: repay the mortgage. Want to offer an above risk-free equivalent yield and get capital gains while reducing risk through a diversified portfolio? No problem: the UK stock market can oblige. Want to offer good advice to your clients? Suggest both. Stock markets, bond markets, and housing markets, all move in cycles. Common sense suggests that maximising investment returns means selling those asset classes that are at the top of their cycle in order to buy asset classes that are at the bottom. Contrarian investme...