ALEX TURNER is the general manager of financial training firm Ambitious Minds
IT ISN’T often the case that all eyes of the City are on Doncaster, but next week’s horse racing festival can’t come soon enough.
The stock market maxim, “Sell in May and go away; don’t come back ‘til St Leger Day”, has proven to be sage advice this year.
The FTSE-100 began May at 6,070 but was down nearly 1,000 points at the start of this week.
That 15% drop had been worse, having bottomed out at a summer fall of more than 20% earlier this month when it statistically became a bear market.
But even from this lower base, the autumn revival that the adage alludes to may prove to be a false dawn.
Research released back in the more optimistic days of May by analysts Evolution Securities sought to rebuff the veracity of “Sell in May” and concluded that its accuracy “rests on a few key recessionary years”.
Yet it is still possible that 2011 could be described in such terms.
We’ll have to wait until November 1 for the publication of the third-quarter data to see if the UK’s GDP has managed to maintain even the current barely-there rates of growth.
Being sceptical about short and medium-term prospects for the economy has proven to be a useful strategy since the UK officially moved out of recession at the end of 2009.
I see little to make me change that approach with so much fragility around.
What is clear is that four years on from the run on Northern Rock, which will be marked two weeks today, there is still huge uncertainty about the solutions to our economic problems.
It seems that the only thing we now know with more certainty is just how many fault lines run through what we previously thought of as a relatively stable system.
It is glib to say that companies, and their management, need to be more efficient or more innovative.
The businesses that have survived this long have more than proven their mettle, their ability and willingness to fight for every pound.
But some can’t continue operating in survival mode for too much longer.
It is possible that St Leger Day will mark an improvement in fortunes.
I hope it does, too – but I wouldn’t bet on it.
