Gary Potter: Equities poised to prosper as normality returns

ON ASSET ALLOCATION

After the challenges posed by economies and stock markets in 2008 and 2009, 2010 does not look like it will be much easier to gauge.

The early rise in equity markets in January, followed by the correction in February and subsequent recovery to even higher levels, merely serves to add confusion to an already wide range of economic and stock market forecasts for the year ahead. While we do not profess to have all the answers, it strikes us that some sense of normality in this rather confused world is now beginning to reassert itself on financial markets. It also seems to us that many investors are confusing their time horizons, by taking obvious long term bear issues and discounting them in share prices today, when in f...