Market uncertainty spells opportunity for investors as the market experiences an intense and volatile start to 2022, according to boutique investment house, Prime Value Asset Management.
ST Wong, chief investment officer, said uncertainty may be uncomfortable for investors, but in markets, uncertainty was not risk.
“Uncertainty creates opportunity through volatility, which produces great entry points into great companies,” he said.
While there might be some worrying moments as markets react to news including new COVID variants, Wong said it was important to cut through the noise.
“It’s essential to keep a focus on the long-term. Once you focus on the short-term, your ability to make mistakes compounds,” Wong said. “Bull markets can persist over multiple cycles.”
Wong’s Prime Value Opportunities fund achieved consistency as a top-quartile performer over one year, three year and five year time periods, according to FE Analytics.
The Prime Value Opportunities fund delivered 20.3% performance after fees for the year ending 31 December 2021, and 11.8% per annum after fees since inception in 2012.
Wong said it was often the case that stocks became overvalued at the start of a market recovery.
“Globally market recovery from COVID lockdowns remains a major investment theme,” Wong said.
He said global demographic shifts such as ageing populations and a growing global middle class were long-term themes, which should outlast short-term market movements through 2022 and beyond.
On the ageing population: in 2020, there were 727 million people globally aged 65 and older, yet by 2050 this would surge to an estimated 1.5 billion people.
“This ageing theme should drive health stocks like Ramsay Healthcare, which has moved sideways since the pandemic yet remains a world class operator with a $10 billion hospital book,” he said.
The global middle class was growing, and would be an estimated 5.3 billion people by 2030.
“This major global demographic shift to the middle class equates to global opportunity in educational services, healthcare, and luxury goods,” Wong said.