Investors take sides on the boom vs gloom debate

As well as these, I would include technology and financial stocks, even though the recent financial crisis has been the worst of the six banking crises I have seen in my career.

One of the things I do at turning points in the market is look at historical patterns. I have learnt that the best time to own financials is normally during the first two years coming out of a crisis. When they led the downturn, they have also led the upturn.

This time has been no different. While increased regulation poses a risk, most companies evolve and adapt to cope with these changes.

Consumer stocks that follow the business cycle, such as general retailers and value stocks, also show a good record of leading most market recoveries but I would be inclined to shift from these more cyclical areas into growth stocks over the medium term.

As growth in the West will be so sluggish, I expect greater opportunities to be found in Asian markets with good domestic demand, where growth should be higher.

Chinese stock markets have been leading the way and, although they need to consolidate, the long-term picture remains very good. I'm less keen on emerging markets that are very dependent on commodities or exports. Commodity and industrial shares were the stars of the last bull market and, despite leading the recovery this year, I don't think they are going to do so well from here.

One thing not worth focusing too much attention on at market turning points is the economic outlook. If you wait for all the economic indicators to turn positive, you are likely to miss a significant part of the bull market. Recent months have shown that only too well.

How to follow Bolton

If your subscribe to Anthony Bolton's view of the market, make sure your portfolio includes holdings in those companies that tend to perform well when the business cycle is picking up, including smaller companies.

Fidelity's UK Special Situations fund invests in such areas. Adrian Lowcock at Bestinvest also recommends Black Rock's UK Special Situations fund and Old Mutual's UK Select Smaller Companies fund.

Bolton likes technology companies but there aren't many in the UK market. Lowcock said: "M&G American has more than 20% exposure to information technology. It also provides exposure to financials, another area Bolton favours."

For emerging markets, Lowcock would consider First State Asia Pacific Leaders or the First State Global Emerging Markets Leaders, though it may be worth waiting for market falls before getting in.

BEAR - Neil Woodford of Invesco Perpetual

On the UK economy, I see little reason for confidence and I do not anticipate meaningful recovery in the next three to four years.

In my view, markets have seized on stabilisation, which has only been achieved through fiscal intervention by UK authorities, and have concluded that a swift return to sustainable levels of trend-like growth is likely.

This is not a scenario I subscribe to but despite the difficult economic background I am very positive about the outlook for my funds.

I believe that the imbalances in Britain and many other developed economies, which led to the problems we are trying to negotiate our way through, have not been addressed.

The excessive levels of consumer debt in the UK are only now beginning to be reduced from record levels. The banking system remains in a protracted period of rehabilitation and the scale of government debt will see tax rises and spending cuts for years to come.

We may well finally emerge from recession in the final quarter of this year but in this kind of environment I think it is possible that the UK could experience further contraction during the years ahead.

My expectation is that the economy will see little or no growth for the foreseeable future and so a period where we experience a further couple of quarters of negative growth is quite feasible in my view.

While I remain unconvinced by the economic outlook for the UK, I hold a high level of conviction in the companies that currently dominate my funds.

In my view, these businesses exhibit qualities that are essential in a period of protracted economic weakness - sound balance sheets, resilient and dependable earnings and sustainable business models. They also have secure and rising dividends, which are the key drivers of long-term share price performance.

The companies most clearly demonstrating these characteristics are typically within the tobacco, pharmaceutical, utility and telecom sectors. Despite their sound fundamentals and the weakness in the domestic economy, the share price performances of these businesses have generally trailed the wider market's rally.

Over recent months I have used this to build my exposure to these companies as I believe that current market conditions offer the chance to buy into high-quality businesses at valuations that are rarely available. This is the key reason why I remain confident in the long-term prospects for the funds I manage.

Clearly, my views on the economy and where the value lies among UK equities are at odds with the market as a whole. However, I believe that as the prospect of a V-shaped recovery recedes, markets will once again revert to valuing companies based on fundamentals and my funds are positioned to exploit this outcome.

How to follow Woodford

Many advisers agree with Neil Woodford that the market has run ahead of the economy and recommend a cautious stance.

Darius McDermott of Chelsea Financial Services said: "Stock markets generally overdo things. What is clear is that the UK is still in recession and even if it exits this state in 2010, economic growth will be at best anaemic."

As well as Woodford's High Income or Income funds, McDermott would consider Artemis Income, run by Adrian Frost, and JO Hambro Capital Management UK Opportunities, managed by John Wood. Like Woodford, the two managers focus on quality companies with strong balance sheets.

Artemis Income is up 15.7% over the past six months and JO Hambro has gained 17.6%, compared with a return of 11.6% from Invesco Perpetual High Income, according to Trustnet, the research firm.

Pension ready for anything

Claudia Barber, a marketing manager, is hoping to protect her self-invested personal pension against further economic shocks with the Invesco Perpetual High Income fund.

"People think it has underperformed a little but Neil Woodford has a proven record. Held as a long-term investment, I think it is in a good position to do well," she said.

Barber, 28, from Earlsfield, south London, has also been advised by her broker, Bestinvest, to hold Fidelity's UK Special Situations fund as part of a balanced portfolio.

She said: "My pension is prepared for whichever way the market goes."