In This Chapter
Looking at fashions and styles in investing
Getting to know the UK stock market
Weighing up big and small companies
Taking a secret peep at how fund managers make decisions
One stock-market theory advises investors to watch the hemlines of women’s skirts. When they go up then folk are optimistic and share prices will rise. But when they go down, it’s a sign that harder times are coming and that share values will fall.
It sounds a load of nonsense. However, it makes some sense to link fashion to finance. Short skirts often mean free-and-easy living, which comes from optimism – the roaring ’20s and the late 1960s are good examples. Long skirts mean the opposite – they indicate life getting more difficult. And of course, they’re useful in cold climates.
Well, that’s the theory, for what it’s worth. But the fact is that investment styles go in and out of fashion just like the clothes you wear. And it takes a brave person to flout fashion altogether.
Equally, what goes around, comes around. When it comes to investment ...