Stabilising economy brings cash-flush investors back into the equity markets

Equity markets have seen strong rallies in the last six months.

Two particular forces are at work: firstly, there is growing evidence economies are at least stabilising and probably starting to recover; and secondly, investors have large amounts of cash, reflecting the turmoil they experienced in 2008. In terms of economic recovery, we are seeing positive indicators from all around the globe. Housing markets appear to be stabilising, while both business and consumer confidence is recovering from very depressed levels as various stimulus measures start to kick in. In terms of investor cash levels, we witness a lot of anecdotal evidence that suggest...