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Investment advice news – Investor caution still apparent

21st February 2012

In Europe some progress has been made by Greece in resolving its considerable debt problems with an agreement in the Greek Parliament to accept a further significant round of austerity cuts. Much however remains to translate this agreement into practical reality, not least because of the continuing riots in Athens.

Elsewhere, in the United States there are now some indications of a slow but positive economic recovery and with the US Federal Reserve having indicated its willingness to keep interest rates on hold for possibly the next two years, a basis for maintaining this recovery could well have been established.

In the United Kingdom the Consumer Prices Index has recently fallen in line with the Bank of England forecast and having injected a further round of quantitative easing into the United Kingdom economy, the Bank is now hopeful of avoiding a double dip recession. There are however no guarantees!

As a result, in this country the Financial Times 100 share index presently stands at just under, 5900 points, which on an historical basis is a price earnings ratio of approximately ten against an average of approximately 14. Nevertheless, caution is still being exercised by many investors.

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