Let the buyer beware

By Elissa Bayer, August 2, 2012

If investors have concerns about where to invest money at the moment or have queries about the information they are receiving, then the constant stream of news is not going to reassure them.

The past few years have been dominated by the growth of China and the emerging markets but the worry has always been that Chinese figures and information have been difficult to read with the government electing to put out what it has wanted. What is clear is that the heady growth figures of the past five years are slowing down and whilst the growth figures are still very positive, 4-5 per cent growth might be more realistic, rather that 9-10 per cent.

The Chinese economy has been based on a strong export market and the collapse of the Eurozone has meant that China could not stay immune. However, there is strong demand in China itself and the other countries in the region such as Singapore, the Philippines and Malaysia, and the newer economies; Vietnam, Cambodia and Laos, are beginning to work together, forming a more cohesive trading Union. These are interesting markets to follow but as always, it is the information on how the investor makes money that is more difficult to come by.

Then there is the information coming from the banks. The breathtaking amount of money lost, the false information provided over the Indices and trading markets is bound to unsettle investors. A full-page newspaper ad taken out by the chairman of Barclays, Marcus Agius, to express how sorry he and his board were did not, I feel, reassure customers or investors. Customers are voting with their feet and moving their accounts, and while bank shares at this level remain cheap, there is a real concern that there might be more bad news to come. Giving back bonuses is a start but standing down and seeing the size of the pay-offs is bound to cause more comment.

The old Stock Exchange adage "Caveat Emptor" - let the buyer beware - has again never rung so true. Happy investing.

Elissa Bayer is an investment director at Williams de Broë

Last updated: 12:08pm, August 2 2012