FTSE opportunities for long-term investors
Trading volumes in London are higher than those of the dotcom frenzy. But current distortions in the market are creating opportunities for shrewd investors.
Trading volumes in London are far outstripping those seen during the dotcom frenzy, despite share prices still being below their last bull-market peaks. Average monthly turnover in FTSE 100 stocks so far this year has been £187bn, 65% higher those seen in 2000. "Shares are simply being traded more often," explains Tony Tassell in the FT. A greater volume of purchases by hedge funds and other very active investors accounts for up to 50% of market volumes. Increased share buybacks and derivatives-hedging have also contributed. But the presence of many investors with short-term agendas is creating distortions, says fund manager Ed Burke of Invesco Perpetual. This will "present opportunities for investors who take a longer-term perspective".
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