Last week, while stock markets were falling and every piece of economic data created ‘double dip‘ headlines, we learnt that one of Britain’s most respected fund managers had slashed his fund’s cash holding by more than two thirds.

Philip Gibbs who runs the Jupiter Financial Opportunities fund with Guy de Blonay, had just over 41% of the fund’s assets in cash in June, but by July the figure had fallen to just 13.65%. The cash has been used to increase the fund’s exposure to all geographic regions, particularly Europe and the UK, but not North America. Gibbs has also moved out of the safe haven of gold in another of his funds. You can get more detail here: http://www.citywire.co.u...lls-out-of-gold/a426020

In fact, after five months in which fund managers reduced their allocation to shares, a Reuters poll of 11 big investors published today showed a marked move into these riskier assets.

The message? Fears of a return to recession may be overblown and UK companies with overseas earnings can make a mint.

Reuters’ Chris Vellacott quoted Andrew Milligan, head of global strategy at Standard Life Investments: ‘Concerns about a double-dip recession are certainly overblown. Too few investors look at economic history. In reality such events are really rather rare, especially once a private sector recovery has begun.’

While Alec Letchfield, chief investment officer for wealth at HSBC Global Asset Management, told the newswire: ‘In terms of positioning in the UK equity market, we would stress that thanks to the globally diversified nature of the UK equity market, only about a third of market-wide earnings come from the UK economy.’

Meanwhile, you have the likes of Albert Edwards warning that investors – at least those in the US – are in for a 'rude shock'.

This leads to numerous questions for the smaller investor – if you have been sitting on the sidelines, is now the time to sell down that cash pile and move more of your money into shares? Or are you wary of the opinions of financial experts and will steer well clear thank-you-very-much?

When we begin to measure every country and region of the world in terms of annual profit and loss, based on import/export costs on some form of internationally agreed criteria we might be able to assess real performance more readily. At the moment differing accountancy standards and reliability of individual countries standards of honesty e.g Greece, serve to muddy the waters and obscure valid reasons relative performance of individual currencies. Ratings by Standard and Poor and the like have shown themseves to be little more than guesswork. It is time investors were provided with more reliable information and countries as well as companies were fined for missleading statistics. The fine pool could finance recompense for missleading investors

Gibbs has underperformed this year anyway, so why follow him? Nobody knows. I have been buying the market all the way down and all the way back up and will I continue to do so every month. IMO, it's all that the small investor can realistically do. I am buying income generating equity and I admit to being nervous as the returns have not been good, so far. But I remain invested and in the meantime, reinvest the dividends. I can't see where else to get a decent return on my pension fund on a 10 year horizon.

My gut feeling: it's too early to buy as stocks are heading a lot lower. I'm not worried about double dip in US or Europe debt problems (worrisom as they are). My main worry is China, on which so much hope in pinned at the moment. I'm not worried about growth rates coming down to 7 or 8 or even 5%. My fear is that the officials are fiddling with the statistics and hiding problems such as double digit inflation and over-capacity. From what I hear things are quite bad on the ground...wages are not rising enough to keep up with inflation, and the reports of domestic consumption are widely exaggerated. When you hear Chinese workers committing suicide to demand higher wages, you know things are not as rosy as government statistics have you believe.

That's the spirit - ignore fundamentals and follow the herd. What can possibily go wrong?

I agree with Joe Soap (and in this case Mr Buffet) be greedy when others are afraid. My chief mistake was to sell half my XP Power when they doubled during the worst of the 2008 - 2009 market. They have almost tripled since. It is a stock pickers market.

You are absolutely spot on TB. Institutional investors are sitting on their hands becuase they are being scared out of the equity markets by the hedge and bond funds. Both are short equities and long bonds and will devote any time and resources they have to use the hapless media idiots to peddle apocalypse scenarios helpful to their positions. As we saw from yesterdays' snap back rally the market is getting tired of bein sat on by these crooks. Sadly the the institutional funds continue to watch from the sidelines as a lot of money is now run by kiddies barely out of school. Gibbs, Nutt , Woodford and others like them have it all before. They may not always get it right but at least they have the experience that many of the current grop of fund managers lack. By the time the herd begins to put their money to work the future value of the pensions many of their customers were hoping to get will have been substantially lowered. Hedge funds and some of the large bond funds are mugging us on a daily basis. Do your own research and back up the truck - dont give your future wealth to the Mayfair muggers.

Hi Terence

I am glad you are pointing out one of the higher yielding FTSE100 companies.

You may be interested in our write-up on National Grid's dividend history and prospects, at http://www.early-retirem...d-dividend-history.html

Best

Steven Dotsch
Editor
www.Early-Retirement-Investor.com

Thanks for the feedback Jeremy. I will stay with Centamin for the moment. I also do country diversification, mainly Asia (but not Japan). I'm sure the US and the EU will come back, but I don't feel it is quite yet. I will have a look at the Greenwich Loan Income Fund - and I agree about dividends being a bit unreliable! Lloyds, Persimmon etc etc.....

Read this, then buy into equities!

http://www.telegraph.co....ead-long-live-bonds.html