The 2009 financial year will go down in history as one of the worst on record, despite a late rally leading into 30 June. In a recent piece in the New York Times, Nobel Prize winning economist Paul Krugman noted that ‘the possibility of falling into the abyss seemed all too real’. He likened the genuine panic that swept markets in October 2008 as similar to the banking panic of the early 1930s. Continuing the Great Depression parallel he also noted that world trade, industrial production and stock prices were actually falling as fast as or faster than in 1929-30.

However, despite these dire indicators and the predictions (from some) of another depression, most world economies have pulled back from the abyss and with significant help from Government intervention, are starting to show signs of a genuine recovery. For those of you who receive our monthly e-mail you would have read of the optimism that is now starting to pervade economic and market watchers predications and while in most cases indicators are now just ‘less worse’ than was thought, there are some that are starting to turn positive.

The past few months has seen strong rallies in all world stock markets, which has helped to improve the returns of many investors. The constant flow of U.S. corporate earnings and positive outlooks, coupled with economic data and forecasting from central banks, now all point to a longer term recovery. The fact that we have now had an interest rate rise demonstrates how far we have come in such a short space of time.

With the data and opinion pointing towards a recovery we should put 2009 behind us and in the words of George Burns… “look to the future because that’s where I’m going to spend the rest of my life.”