A Brexit deal now appears more likely than a U.S.-China trade de-escalation – but global financial markets are still to remain highly volatile in the near term, meaning investors should revise their portfolios.
This is the warning from the CEO and founder of one of the world’s largest independent financial advisory organizations.
Nigel Green comments: “Global financial markets are likely to fall on Monday and remain highly volatile in the near-term on geopolitical headwinds. This means investors should revise their portfolios to safeguard their wealth whilst simultaneously taking advantage of the buying opportunities.”
The Bedford Park Opportunities Fund returned 13.5% net of all fees and expenses in the second quarter of 2021, bringing its year-to-date return to 27.6%. Q2 2021 hedge fund letters, conferences and more In the fund's second-quarter investor letter, which ValueWalk has been able to review, Jordan Zinberg, the President and CEO of Bedford Read More
He continues: “There does seem to be a glimmer of hope of the UK securing a Brexit deal with the EU. This is largely due to fears that a no-deal Brexit will seriously hit EU economies, many of which are already on the brink of a recession, including the largest one – Germany.
“The last thing the EU needs is the UK to crash out in a no-deal scenario, dragging down its own vulnerable economies. As such concessions towards UK Prime Minister Boris Johnson’s approach seems increasingly likely.”
He goes on to say: “However, this chink of light in a major geopolitical issue will be offset by escalating trade tensions between the U.S. and China.
“The increasing trade dispute between the world’s two largest economies is impacting not only their own economies, but also economies across the world.
“And as further tariffs, punitive sanctions on firms and, possibly, currency devaluations are likely, the situation can be expected to create further market turbulence in the near-term.”
No Brexit deal and China tensions – what investors should do
In a media statement on Friday, the deVere Group CEO said investors could also capitalize on the current geopolitical climate. He noted: “Investors should embrace some volatility as important buying opportunities.
“Fluctuations can cause panic-selling and mis-pricing. Sought-after stocks can then become cheaper, meaning investors can top up their portfolios and/or take advantage of lower entry points. This all typically results in better returns.
“A good fund manager will help investors seek out the opportunities that turbulence creates and mitigate potential risks as and when they are presented.”
Mr Green concludes: “Investors need to stay invested, carefully monitor the geopolitical factors that drive returns, ensure portfolios are properly diversified and revise their portfolios where necessary in order to sidestep the risks and benefit from the major buying opportunities.”