Spring brings opportunities and big risks

By Jeremy Gaunt, European Investment Correspondent

LONDON (Reuters) - Investors are entering the second quarter of the year in two minds -- one says there are scary things going on, keep your money close; the other says it's time to buy.

For the latter, falling stock markets, a historically weak dollar and aggressive actions by monetary authorities to boost market liquidity mean opportunities abound with the investment climate likely to improve.

For the former, deep stresses remain in the world's financial sector, which combined with a slowing global economy threatens more meltdown on financial markets.

"It is very much a mixed picture. The market is taking a very broad brush approach to risk aversion," said Wayne Bowers, chief investment officer for international markets with Northern Trust Global Investments.

Given this dichotomy, it would not be surprising if the volatility that has branded itself on the first three months of this year continues into the second three.

But at least investors will be used to it. The first quarter has been frenetic.

MSCI's benchmarket world stock index, for example, has traded in a more than 11 percent range between low and high since mid-January.

In March alone, it lost 2.35 percent on one day, only to rise 3.18 percent the next and fall 1.50 percent the day after. It is down around 9 percent on the quarter, while other major stock indexes have lost more.