“Sustaining these levels may be unrealistic in the face of a prolonged period of higher input costs, but the evidence of 2021 suggests that any margin compression may not be as severe as some fear.”
Finally, Dent said, there is always TINA [there is no alternative]: people will invest in shares because there is no other viable option for their portfolios.
He commented: “For many investors, a world of inflationary pressures and still-low bond yields means there is no alternative to equities.
“Appetite for the asset class, whether from private or institutional investors, remains correspondingly robust, and the resumption of share buyback programmes by cash-rich companies should only serve to further spur demand.”
So, while there are undoubted challenges ahead, he said, the environment for equity investors was "by no means hostile".
“Although a repeat of the returns of 2021 is likely wishful thinking, there remain abundant opportunities for financially strong, well-managed, resilient companies to prosper.”
sally.hickey@ft.com
