Financials appear cheap, but outlook for UK market bullish

The conservative forecasts for UK equities for 2006 are to provide returns at least in line with predicted dividend growth (10%). However, if the economic environment remains favourable returns of up to 15% are possible. At a macro level the housing market remains a key barometer of the economy, which now appears stable. Interest rates have been cut and are not expected to change much over the next 12 months. Overall, there is every reason for investors to be optimistic and reasonably bullish for the market this year, but do not be surprised if there is a short-term hiccup on the way. ...