Playing it safe

Investors bruised by the falls in markets over the past year may be wondering whether investing in equities is a worthwhile exercise. Negative returns for the market as a whole in 2000, and so far in 2001, have fuelled a climate of fear and shortened investors' time horizons to surviving the next quarter. In this environment, investors, not surprisingly, tend to focus on preserving rather than increasing the value of their portfolios. However, the figures for market returns conceal a good deal of variation from individual companies and highlight the importance of stock selection in a diff...