Inglis-Jones: Gloom could drive 40% equity fall

A continued deterioration in economic news flow could prompt a 30% to 40% swing in equity markets, according to James Inglis-Jones, manager of the £295m Liontrust Income fund.

He said in the event of such a big move, a tremendous buying opportunity would open up for investors. "A 30% to 40% market swing would present a once in a lifetime buying opportunity. It would be dreadful, but it would be a buying opportunity," said the Liontrust manager. "We would see valuations drop to single digit cyclically adjusted price to earnings ratios. This could happen if the nature of news flow continues to deteriorate in the way it has recently," he added. He said one of the biggest headwinds currently impacting investors is the level of indebtedness faced by world eco...