'That was the panic that was'.

Great title from Hartley's (Australia) September round-up: "that was the panic that was", which leads into what is looking like a generally accepted view of global stock markets. In summary: equities are always volatile anyway; equities have always been a reliable medium term growth asset anyway; plus, all panics tend to calm down eventually, anyway.

Add these 'anyways' up and you have a general explanation as to why the risk appetite of fund managers and stock pickers is increasing.

Then, if you add-in the specific of a next-to-nothing yield from the risk-free rate, readers will appreciate the background to the current pro-risk, pro-equity build-up.

Of course, the phrase: "equities have always been a reliable medium term growth asset anyway" doesn't apply to the year 2008, and "the panic that was" which swept away 10 years of savings.

So, the "reliable" bit carries a disclaimer: specifically, that every generation will carry a bit of a blip. Well, that blip has just happened, and it may be that this also adds to the general pro-risk, pro-equity build up.

And build-up is all it really is, as, John Goodlad, Investment Adviser at Hartley's says: "We have moved from exhaustion, disbelief, and demoralisation, to doubt, reflection and conversation."

Goodlad is back in buying mode, but is wary that substance is still required: "we now need solid underlying performance if we are to continue to the next [positive] phase".

For Goodlad, substance is in the 'e' for earnings: "As always, it's all about the 'e'.

"The market [Australian] is factoring in an increase in these earnings so it is now the time for corporate earnings to step up and meet expectations," says Goodlad in justifying positive sentiment even though the Aussie market is already priced at 16 over forward earnings, which is slightly more expensive than the traditional Aussie average of 15.

It was a similar story listening to Tom Elliott, strategist at JPMorgan, who argued that whilst he expected immediate "market dips" he was looking to "buy into the dips because nobody knows when markets would turn, and we are currently overweight equities".

For Elliott, the top tips included US blue chips, even though earnings were up at around 20, a reason for supporting an underlying feeling that some stocks had "risen too high too quickly', but it wasn't a statistic that would put him off as a medium term buyer.

Elliott was also overweight UK stocks benefiting from lowish earnings multiple of around 11 together with cheap sterling - a boon to exports. Elliott was also significantly pro-emerging markets where economic growth forecasts are superior to the Group of Seven rich nations (G7) - further evidencing the current shifting of economic Teutonic plates.

In this highly correlated equity world, where then does happenings in Australia, global equities and Middle Eastern Gulf News readers most obviously cross? Answer: "resources', where gold, oil and commodities generally are always central to economic discussion.

Goodlad's Australian perspective on resources takes him to where every investor should be currently looking: the gold price.

Particularly with gold sailing past the $1,000 mark (and notwithstanding the decline of the US dollar dimension to that). With that background, Goodlad recommends Newcrest and Lihir, as the two majors on the ASX Aussie market, with the suggestion that for a higher risk mid-cap selection stock-pickers might look at Gold One and YTC.

On the black stuff, Australia is more famous for its coal than its oil and Riverside Mining (RIV) is recommended. If the liquid black (oil) price continues to fall, "there may be an opportunity to pick up some of the large cap majors like Woodside at lower prices", says Goodlad.

Ultimately, and echoing London-based Stan Lock at Brewin Dolphin in Gulf News a few weeks ago, "it remains a market to accumulate and trade.

Buying in gloom and participating in various capital raisings has paid off handsomely since March, says Goodlad, noting however that the future still represents opportunity, albeit less spectacularly: "As we move into a more measured phase, we look for visible earnings to back up the forecasts."

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- The writer is Chairman of Mondial Financial Partners.

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