S&W's Deptford increases cash position ahead of market correction

Smith & Williamson's Charlie Deptford has boosted cash and adopted a cautious stance on his UK Equity Income trust in the view markets are due a correction in the next few months.

The former New Star and Barings manager has warned earnings forecasts may be too high following signs global economic activity has reached a peak. “I think we are due a period of consolidation. Equities do not look bad on a headline basis but the key thing is we have had a major recovery in profitability. We have big headwinds coming in corporate profits and I think expectations are too high. When we see earnings struggle, there are downgrades and, therefore, stocks fall. “I am not expecting the market to fall out of bed but I am fairly confident with the conservative positions in the...