Is this the Goldilocks moment for investors to join the market?

INVESTMENT fund managers are eternal optimists. When stock markets fall, they talk about buying opportunities. When they rise, they say there is more to come.

Among the most hopeful is Christopher Rossbach, managing partner of investment manager J Stern & Co. He runs the World Stars Global Equity Fund which invests in companies with ‘enduring competitive advantages’ – the likes of luxury brands company LVMH, payments processing giant Mastercard and drinks business Pernod Ricard.

Last October, Rossbach compiled research for The Mail on Sunday which showed that provided investors are prepared to invest for at least ten years, they should achieve annual returns that beat any other financial asset – even if they suffer short-term paper losses along the way. His findings were based on analysis of the performance of the MSCI World Index and FTSE All-Share Index going back to 2000. So, someone investing in the MSCI World Index at the beginning of 2000 would not have generated positive annual returns until the end of 2009. But if they had held on until the end of September last year, they would have enjoyed annual returns averaging 6.5 per cent.

‘In an inflationary environment, equities are the only large, liquid and accessible asset class which can generate significant returns,’ he told me. ‘Patience is rewarded time after time when it comes to investing.’

A few days ago, London-based Rossbach was back in contact with an update. Despite all the doom and gloom since last October, he was keen to report that the MSCI World and FTSE All-Share had both risen in value – as indeed had his World Stars fund.

More interestingly, as far as investors are concerned, he said that a world ‘with solid global growth, interest rates of between four and six per cent and inflation below four per cent was one to look forward to – not be afraid of’.

‘For investors, it is Goldilocks all over again,’ he said, referring to Goldilocks going into the bears’ cottage and tasting three bowls of porridge – one too hot, the other too cold and the final one just right.

Rossbach’s view is that now is a ‘perfect time’ to invest – ‘neither too hot, nor too cold’.