Stock selection is key to future success

Despite two years of broadly trend growth in the UK economy, investors entered 2002 having suffered a second successive year of negative returns from domestic equities. As the UK economy is forecast to continue growing robustly this year, investors will be forgiven for hoping that this rather unusual relationship between equity returns and economic growth will not be maintained for a third year. Among the G7, the UK appears well placed in 2002 and forecasts of growth of over 2% look realistic unless global influences deteriorate markedly. Consumers have responded to the lower interest rat...