The end of free markets

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The end of free markets

Is the three-year equity bear market nearing its end? Or is it just the beginning of a financial and economic collapse that could shake the very core of the free-market capitalist system?

"TO GIVE UP on equities, you have to give up on capitalism. To say that it's no longer appropriate to invest in equities means you don't believe that economies and earnings will grow."


The closing words of the mid-July presentation by John Ross linger after the presenter has slipped next door for some well-earned lunch. These are not the views of a financial doom-monger, after all. This is a portfolio strategist at Fidelity, the world's largest mutual fund manager.


Ross has just given a compelling analysis of why equity markets might or might not be about to pull out of their 30-month nosedive. His talk - entitled "Has the bear growled enough?" - is nicely balanced.


He reviews the evidence of a century of stock market ups and downs, presents all kinds of reasons why markets could be seen as either oversold or undersold but ultimately comes down on the side of a generation-old truism: over time, nothing beats equity investment.


That's fair enough, if a little predictable. But it is the parting shot that strikes an unsettling note. With major stock markets well on their way to a third successive year of negative returns - a state of affairs unknown since the 19th century - people are starting to think the unthinkable.





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