2008 tipped to be 'Year of the Trader'

Monday, 04 February 2008 12:00

2008 could well follow 2007 as a year when regular traders made greater gains than investors.

Rebecca O'Keeffe, head of fund management at investment website Interactive Investor, explained with the FTSE ending 2007 at roughly the same level it started at, it was "a year for regular traders rather than the steady investor".

"With plenty of movement throughout the year there were opportunities to make and lose money," she said. "As always it was about picking the right moment."

"However, those who did make year long investments made significant money if they picked emerging markets or natural resources."

The research shows the most traded equities over 2007 were Barclays, Northern Rock, Royal Bank of Scotland, BP and PartyGaming.

"Financials, including Barclays and Northern Rock, were heavily traded stocks in 2007," Ms O'Keeffe said.

"It was obviously a turbulent year for these companies but investors still see the investment potential. This is likely to be the same for 2008."

2007 also saw commodities performing well.

"As commodities performed well in 2007 and Gold hit a new high there was certainly money to be made in this sector," Ms O'Keeffe explained.

"Early signs in 2008 indicate the growth will continue but it will be a big question for investors how much they choose to expose themselves to this volatile sector."

Looking forward, Interactive Investor now expects 2008 to continue as 2007 left off.

"2008 has started in a very similar way as 2007 ended," she said. "It remains very much a traders market.

"Many commentators are predicting further stock market volatility for the year ahead, which presents ample opportunities for those in the mood for trading.

"Investors do need to expect more market volatility, but five years into a bull market, will we see some kind of correction in the market this year? It may be that UK investors, who generally already have a significant exposure to the UK market, will continue to look for opportunities in overseas markets and specialist sectors."

Ms O'Keeffe concluded: "The doom-mongers have been out in force already as the Dow Jones had its worst opening week since 1904. But as that year ended significantly up, we shouldn't read too much into that."

She added any future interest rate cuts in the UK from the Bank of England should also help to boost the market this side of the Atlantic.

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