IFA of the year: Risk takers well placed to fly

The FTSE 100 index ended 2010 at about 6,000, a two-year high. Many of you will have seen the prediction from Keith Skeoch, the chief executive at Standard Life Investments, that the index could reach 6,900 by the end of 2011. Rising corporate profits and reduced fears of double-dip recession drove the recent rally - indeed, December's jump in equity prices was the largest for 23 years.

We expect the positive momentum behind the market will be maintained in 2011. Continued global economic recovery and the high exposure by many large UK companies to overseas earnings will deliver another year of strong cash flow. Although the ride will be bumpy, just as it was in 2010, it should be noted that, even at 6,900, the FTSE would still be below the all-time high of 6,950 reached more than a decade ago, in December 1999.

Time to buy? A bumpy ride creates good opportunities. In our Global publications we have set out in some detail the difficult decisions facing policy makers as they navigate the continued aftershocks from the financial crisis. In the coming year investors will need to be reassured that China can quell its inflationary pressures, that the Eurozone area can hold together, that fiscal tightening in the UK or Europe will not be too abrupt, that oil prices will not surge and squeeze company profits and household incomes alike, that the Korean peninsula will not erupt - just some of the issues to consider...

Underpinning all this is the long, slow process of rebalancing economies, restoring banking systems and housing markets to health, transferring resources away from the public to the private sectors. In summary, equities, and other risk assets, should perform well - in those periods when investor attention is not diverted by complex geo-political or financial issues.

• Andrew Milligan is head of global strategy, Standard Life Investments