Right time to buy shares, say experts

It may take nerves of steel, but some investment pros are already telling their clients to start buying shares.

After the collapse in values in the past three days, fund managers have been licking their lips at the prospect of picking up some tasty bargains.

Today, UBS advised punters to fill their boots. Strategist David Bianco said: 'We understand the macro challenges facing the economy and many uncertainties, but we believe this level of pessimism is unwarranted.'

Bianco was advising clients about US shares, but, with the fortunes of the UK economy, and its companies, so closely tied to those of America, his views were quickly taken by optimists here as a signal to buy.

source: thisismoney.co.uk

'We encourage investors to use this correction as a buying opportunity,' said Bianco.
He claimed that the Standard & Poor's 500 index - a benchmark of the country's biggest 500 shares - had reached the point at which it would not fall much further.

In the past five recessions, he said, share prices reached their lows six months before company profits hit their trough. 'The S&P has reached this point,' he argued. Judging by previous recessions, he said, the next stage is six months of share-price gains averaging 22%.

Royal London fund manager Jane Coffey apparently agreed. She said that she had spent the last two days sitting tight, watching prices fall to what she saw as 'more reasonable' levels. Later this week, she will be back in the market buying shares, she said.

Andy Brough of Schroders was also today refusing to be panicked into selling. He said the best advice was to sit back and do nothing until prices start to stabilise again.