The mechanics of momentum

After the losses suffered in 2008, this year has proven something of a pick-up, with investors developing sharper defense mechanisms in the wake of the credit crisis. But what is providing the momentum driving investors into 2010?

The close of the year inevitably draws the attention of investors to market forecasts for the forthcoming 12 months. Understandably, the aftermath of the financial crisis has built a strong self-defence mechanism into investor behaviour. For those that suffered the losses of 2008, getting back into the market justifiably brings with it not only caution, but also an element of cynicism surrounding the various investments and instruments presented to them. Yet 2009 has actually proven to be a good year for investors. Global equities are up some 30% year to date, and are up over 60% from th...