While a recovery in markets may be some way off and possibly nowhere near as robust as previous recoveries, some quality assets offer good long-term value, says chief investment officer from Barnard Jacobs Mellett, Mark Appleton.

"We continue to advise that investors take a cautious stance as volatility is likely to stay at high levels for some time," he says.

But Appleton feels returns over the longer term are likely to be in excess of money market and bond market alternatives.

"Locally, historic earnings yields relative to bond yields are where they were at the end of the previous bear market in April 2003," he explains.

Investing in the short term is akin to investing in the dark, he cautions.

"In the longer term we are severely stress testing earnings streams, cash flows etc. It is crucial that quality is emphasised in the make-up of equity portfolios. Quality, in our view, is evidenced by strong balance sheets, strong sustainable cash flows and good management," says Appleton.

"While our portfolios are made up of good quality stocks and appear to be showing deep value at present, value itself is unfortunately not an indicator of the likely direction of stocks in the short term," he adds.

"We continue to put a strong emphasis on risk management and a well balanced approach to investment. Panic is not an option," concludes Appleton.

I-Net Bridge