Bestinvest today responded to a bout of fund managers calling the market, telling investors to try to “shut out the noise”.
Last week Anthony Bolton called the bottom of the stockmarket (for a second time), while today Neil Woodford, Invesco Perpetual’s income guru, warned that Britain and America will not see sustained economic recovery or growth for at least three years.
According to Bestinvest, the only way to tell if any recovery is the “real deal” will be after the event. Instead of getting caught up on the predictions of managers, it says that investors should follow three simple rules:
– Do not chase the market. Invest on weakness.
– Invest for the longer term.
– Drip feed money into the market because the recovery may be a “long and winding road”.
There has always been a trend of fund managers calling the markets: it gets their name in the press. The bigger the name, the more attention it receives. However, investing on such calls would be unwise.