Confident investors capitalise on recent market falls

As sterling fell to an eight-and-a-half-month low against the dollar this week, investors' fears around the continuing fiscal difficulties of some eurozone countries took its toll on the markets.  Concerns about the debt burden facing Greece and the potential for any default to spread into other eurozone nations has resulted in investors fearing once again for the fragile global economic recovery.  However, many clients of Barclays Stockbrokers, the UK's largest stockbroker, have capitalised on this market turmoil, with 61% buys vs. 39% sells between Tuesday 2nd and Friday 5th February.

Barbara-Ann King, Head of Investments, Barclays Stockbrokers, comments: "We have consistently seen our clients capitalising on market movements, and over the past year there has been clear correlation between market drops and the buy/sell ratio increasing.  Generally we tend to see an increase in the purchase rate (by number of trades) as, or just after, the market takes a sharp fall as investors seek to exploit weakness in the market."

Henk Potts, Equity Strategist, Barclays Wealth, comments: "Equity markets have sold off in recent weeks, driven in part by growing fears of a debt default in Greece and the potential knock-on effects elsewhere in the EU, while both China and India have signalled that the days of very loose monetary policy are over. Investors have also been troubled by the seeming lack of communication between policymakers at a global level and the ongoing failure of some countries (such as the UK) to outline any firm plans to return their economies to a more stable footing.

"We advocate remaining fully invested in a diversified portfolio that corresponds to investors' overall risk levels, as selling on the basis of the market's concerns alone does not usually prove to be a good investment decision. However, as the situation becomes more volatile, investors might start considering some downside protection."