Don't Bank on a V-Shaped Recovery

The Week: Morningstar columnist Rodney Hobson is working through the recent trading updates and looking for recovery opportunities

Rodney Hobson 1 May, 2020 | 9:09AM

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Talk of a V shaped recovery, where the market rises as fast as it fell, is premature at best and more likely to prove wildly optimistic. I thought I was an incurable optimist looking for long-term buying opportunities to get my ISA allowance underway but even I realise that stock markets don’t work in V shapes.

I’ve commented before in this column, but it needs repeating: bear markets are fast and brutal; bull markets are a slow grind. The next recovery will be no different. Although the FTSE 100 climbed above 6,000 points this week, sellers soon took the opportunity to cut losses or bank profits. There is no guarantee that we have seen the bottom, although I am working on the hope that just under 5,000 points is the pits.

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About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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