Bank of Ireland Private Banking today maintained that equity markets may now have hit the bottom of the cycle and that investors should be alert to the potential for recovery.
A positive indicator of this, claims the bank, was highlighted by the fact that Private Banking’s Global Equity Fund has seen gains of nearly 10% since the low point in March.
"No one foresaw the scale of the credit crunch related losses at the outset and it has taken a considerable time for this to work through, much longer than we originally anticipated," said Kevin Quinn, director, Bank of Ireland Private Banking.
"However, signs are that the market is now looking beyond these issues and we may be seeing some solidity in the gains that markets have made since March.
"Whilst the credit crisis may well not be over, we believe that markets are looking past this and have priced in the bad news at this stage. Of course the real economy impacts are there to be seen but if history repeats itself, we will see equity markets price in recovery well before the economy shows firm evidence.
"We believe that the ‘St Patrick’s Day Massacre’ may have been the bottom of the market and that we have now seen the typical signals that markets are in a bottoming out phase – namely a financial failure, a drop in investor confidence and a testing of previous market lows.
"What’s more, after all the difficulties of recent months, equity markets are looking comparatively cheap relative to other assets. With the Fed looking like it’s near completion of interest rate cutting and the dollar tentatively beginning a recovery, investors need to be alert."