Investors should be selective about global sell-off
This week’s global sell-off, which saw European and Asian indices drop, should serve as a reality check for investors, according to chief executive and founder of deVere Group’s Nigel Green.
Tuesday saw a 2.3% drop of the pan-European Stoxx 600 index and 2.4% drop of London’s FTSE 100, which followed a 2% drop of Hong Kong’s Hang Seng and 3% drop of Japan’s Nikkei 225 index.
Green said the world’s economy was at a point of major readjustment following an unprecedented economic shock and this was fuelling concerns that rising inflation will trigger central banks to tighten monetary policy.
“It is to be expected that there would be a jump in prices and supply shortages, in goods like chips and some commodities, as economies re-open and pent-up demand is unleashed by households, businesses and entire industries,” Green said.
“It is this scenario that is rattling markets and triggering a global sell-off.”
Green added that although tech shares were bearing the brunt of the sell-off, this would also be used as an opportunity.
“Savvy investors will be drawn to the massive growth that tech offers and this sell-off will used as a buying opportunity. Nobody seriously believes the future isn’t online,” he said.
Therefore investors should be wise to be “selective” about the sell-off.
“With some of the heat being taken out of the markets, with some stocks way too high, they are likely to – perhaps more judiciously than before – move to capitalise on this dip. Of course, I don’t have a crystal ball, but history shows that stockmarkets typically rise over the longer-term. Therefore, in the near future, I predict many investors will be seeking out the buying opportunities that exist,” he concluded.
AUTHOR
Oksana Patron
Recommended for you
Insignia Financial has reported net inflows of $448 million into its asset management division in the latest quarter, as well as popularity from advisers for its MLC managed accounts.
With ASIC questioning the dominance of research houses when it comes to retail usage of private market funds, a research house has shared how its ranking process sits alongside ASIC’s priorities.
Two Australian active fund managers have been singled out by Morningstar for their ability to achieve consistent performance and share price growth in the past 12 months.
Pinnacle Investment Management has expanded its private market coverage, forging a strategic partnership with a private markets manager via a 13 per cent stake acquisition.
