Ashby: It's not the economy, stupid

Graham Ashby, head of UK equities at LV= Asset Management (LVAM) looks at the prospects for the UK equity market in the face of a weak economy.

Early in 2010, I carried out a number of presentations around the country entitled ‘It’s Not the Economy, Stupid’ – trying to make the case that the UK equity market is not the same as the domestic economy. A year on, and it is clear this strategy has worked, with the FTSE All Share index producing a total annual return of 15.1% to 31 December 2010 – despite ongoing lacklustre GDP growth and higher inflation than was generally expected. Of course, one of the reasons for this better performance from the UK equity market is many listed companies now have significant overseas exposure in t...