Is it time to consider a contrarian investment strategy?
As the UK stock market continues to fall, property values continue their downward spiral and the UK retail sector continues to worsen, there would seem little reason for UK investors to even consider an investment in any of the above areas. However, many people are fans of the contrarian investment strategy which effectively means "going against the trend". Is it time to consider such a strategy for your investments?
First of all, we do not intend to give any specific investment advice in this article as professional investment advice must be taken for your specific situation and your specific investment needs. However, even if the various investment sectors of the UK continue to come under severe pressure in the short to medium term, they will at some stage hit the bottom. Very few UK investors will be able to predict the bottom of any market and will be lucky to buy just before the upturn, but it may be interesting to consider staged purchases on the way down.
While there is no doubt that investment values have fallen over the last 18 months, a significant portion of this is down to investor confidence which is literally shattered. When investor conference finally returns this will add a premium to the value of many investments just because investors are again showing interest.
This can be difficult investment strategy to get your head around and understand completely, but it is a case of attempting to take advantage of over reactions in investment markets to create the potential for medium to long-term gains. Sounds easy, but not quite as simple in practice!
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