Caution urged over long-term investments

BRITONS should pursue a cautious long-term investment policy in 2011, according to a leading Yorkshire investment manager.

Vanessa Eve, assistant investment manager at the Leeds office of Charles Stanley, said that quantitative easing played a major role in boosting overall equity markets in 2010.

She added: "Certainly speculative investing has chased up equity prices and for short-term investors this has proved extremely lucrative.

"Solutions to the euro zone debt crisis provided a brief reprieve, with markets reacting positively to consensus reached on both Greece and Ireland."

However, Ms Eve questioned whether these strong market movements can continue into the New Year.

She added: "Certainly some consumer expenditure, both in the UK and US, has been brought forward into 2010 and therefore anticipated growth for 2011 may well have to be revised as people rein in their spending.

"Peripheral euro zone economies still remain fragile and whether the measures put in place will see those countries through their austerity programmes remains to be seen.

"2011 will be a year of cautious investment approaches for the long-term investor. We continue to like those companies which generate reliable free cash, have relatively low levels of financial leverage and are committed to progressive dividend policies.

"In uncertain times these companies will see investors through any unseen economic shocks," she said.