UK Stock Market Yields Positive Returns in 2009

According to the latest forecasts, British shares are set to bring the best annual returns in the past 20 years as the year of 2009 was characterised by outstanding recovery of the UK stock market.
Growth of UK shares came in spite of the reports made by the Office for National Statistics, which stated that British economy was seriously stuck in recession back in the 3rd quarter of 2009. However, the FTSE 100 index has grown by 22% over the past year, while the FTSE All-Share has risen by 29%, showing the best growth ever since 1989, when the figure stood at 32.7%.
In the opinion of specialists from Chelsea Financial Services, the recovery on the UK stock market, which was not seriously affected by the economic downturn, can be explained by the fact that the vast majority of British companies have their earnings coming from abroad. Let us remind that earlier this year leading world economies, such as the US, France, Germany, and Japan, showed positive growth despite the fears of economic analysts.
Interestingly, investors who dared buying shares in high-risk sectors made the most significant profits, while shares of smaller companies surged by as much as 50%. In addition, shares in world emerging markets, such as Russia, also demonstrated high performance by generating average returns of 50%+.
The 3 sectors that generated negative or bad returns in 2009 are UK gilts funds (-1.5%), Japan (-2%), and property funds. Economic analysts, however, believe that oftentimes year’s worst performers turn out to be next year’s best, which is why it is helpful to analyse potential changes. This is not always the case, though, and it can be seen on the Japanese stock market, smaller companies funds of which showed poor performance in the past years.
Overall, UK stock market analysts predict that the year of 2010 will be more complicated for investors as shares will see slower growth.