7 JANUARY 1966, Page 19

Investment Notes

By CUSTOS

BROKERS' reviews and recommendations for 1966 are all extremely cautious and some downright pessimistic. Most of them stress the fact that the failure to stop the rise in wages implies that manufacturing industry is entering a period of 'profitless prosperity.' Where prices have not been allomcd to rise to offset the rise in wages, the market must expect shocking com- pany reports, such as we have had recently from the steel industry. (LANCASHIRE STEEL, for ex- ample, ■%hich is now quoted at half its nationali- sation price!) Investors would therefore be wise to confine themselves to strictly defensive shares like banks and—where a higher yield is required —discount houses. In the store group it should not be wrong to pick up GUS and MARKS AND SPENCER on dull days, especially when the latter can be bought to yield 4 per cent.