What a difference a month makes. The FTSE 100 Index reached a peak of over 5,800 on 16 April 2010 and, in the space of a few weeks, plummeted to below 5,000.
Over this same period, over £27bn has been written off the market value of BP – significantly above even the most bearish estimates of the cost of the clean-up and litigation surrounding the oil spill in the Gulf of Mexico. Given the uncertainties surrounding the future of the euro and fears of a slowdown in economic growth in China, this short-term setback in equity markets is perfectly understandable. However, the key question is whether this represents a sign of things to come after a period of excessive optimism, or is a fantastic opportunity for long-term investors to accumulate...
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