All forecasts come right eventually

Well, although I had some doubts about my predictive abilities, it turns out I am some kind of sage after all. The FTSE 1000 has hit 3,500 (near as dammit) and I'd say it's starting to look like "fill your boots" time. Almost.

The problem? Well, it's not downside risk - the headline index is unlikely to slide below that low of 3,300 plumbed six years ago. And it's not opportunity cost - where else are you going to invest right now?

It's liquidity and upside risk. First, only the very rich (and I don't know any of them) don't need access to a chunk of cash in case of emergencies right now. If household income degrades (a euphamism for redundancy) the mortgage still has to be paid and Sir Terry Leahy will want his cut. Second, things might not stabilise and move decisively to an up trend until the autumn. (Remember the old Market saying "sell in May and go away"?) By September, the market will have got its head around the recession and calmed down a bit. Low returns elsewhere will be making equities look much better again. And you'll have six months less of the recession to worry about when you're looking at your cash savings.

(Blast. That's another prediction - and another opportunity to be wrong!)

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