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Fund guru predicts gloomy 2005: the stock market is likely to go 'sideways rather than up'.

Document Cited in Related
Vincent
AuthorBerens, Camilla
PositionInvestment

A leading City figure has forecast a disappointing year for investors, despite the recent economic upturn.

Speaking at a lecture on the asset management industry, Lord Latymer, head of portfolio management and financial planning at investment bank Cazenove, said that he had seen few signs that there would be a significant improvement in stock market performance.

"My role in the next few years is to manage clients' expectations with the view that returns are not going to be in double figures," he said. "Historical trends have shown that, under similar circumstances, the market tends to go sideways rather than up."

Latymer, better known in the Square Mile as Crispin Money-Coutts, told the audience at the British Bankers' Association in London that investors who diversified would be best placed to deal with future stock volatility. An appropriate asset mix would be essential, he warned. "An equity/bond mix is not necessarily the wisest way of investing money. It is better to be broadly diversified across asset classes and within each one."

Looking to the future, Latymer said that it was important not to be affected by short-termism. "Develop a long-term strategic plan and be prepared to rebalance back to it," he advised. "This will put you in a good position to meet the...

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