ROOT
COVID aftershocks present a risk to investors
Investors need to prepare for the growing risk of “aftershocks” from the COVID-19 pandemic.
COVID aftershocks present a risk to investors
Investors need to prepare for the growing risk of “aftershocks” from the COVID-19 pandemic.
The economic slowdown in China, rising inflation and turbulence in emerging markets have been flagged as three major areas of concern for investors, according to deVere Group CEO Nigel Green.
“COVID was like a monumental earthquake that shook the world economy to its foundations – and like major earthquakes, there are potentially highly damaging aftershocks,” said Mr Green.
“For many, life is almost back to normal, but investors need to be aware of the ongoing multiple investment headwinds that have come about as a direct result of the pandemic.”
China’s economy is now expected to slow faster than previously anticipated, with the potential for “serious and far-reaching effects” globally.
“Growth could slump below 5 per cent as a perfect storm is brewing with Beijing moving to reduce its dependence on real estate, to increase regulation in a range of key sectors from education to technology, plus they’re dealing with a serious energy crisis and the lingering impact of the pandemic,” Mr Green said.
Inflation moving from transitory to permanent is also a key risk for investors, potentially triggered by higher commodity prices and continuing supply chain disruptions.
“This will mean that interest rates rise higher and faster than the markets expect, which could trigger ongoing global stagflation,” said Mr Green.
The latest data from the Australian Bureau of Statistics found that underlying inflation had reached 2.1 per cent, entering into the Reserve Bank of Australia’s target range of 2 to 3 per cent for the first time in six years.
Mr Green said that the threat of rising inflation was likely to create turbulence in emerging markets.
“Given the mounting upheaval, investors should stay in the market but should review their portfolios to ensure that they are properly diversified across asset class, sectors, regions and currencies,” he suggested.
“The increasing worry about the aftershocks to the global economy will continue in the near term. What will savvy investors do? Judiciously buy more stocks.”
DeVere recently drew attention to the “undeniable value, necessity and rewards” of sustainable investing and highlighted that 44 per cent of its clients were now considering exposure to ESG investments compared to 26 per cent a year ago.
RELATED ARTICLES
Invest
Digital finance innovation could deliver $19 billion annual boost to Australian economy
Digital finance innovation has the potential to deliver $19 billion in annual economic gains to Australia, according to new research from the Digital Finance Cooperative Research Centre. Read more
Invest
Echelon completes $400,000 acquisition of Northern Territory gas permit
Echelon Resources has completed the acquisition of a 100 per cent interest and operatorship in Exploration Permit EP145 in the Amadeus Basin, Northern Territory, for $400,000. Read more
Invest
Institutional investors return to risk-taking as tariff fears ease
Institutional investors moved back towards risk-taking in late May following delays to trade tariff implementation, according to State Street's latest Institutional Investor Indicators. Read more
Invest
Soul Patts and Brickworks plan $14 billion merger to create investment powerhouse
Soul Pattinson and Brickworks have announced a proposed merger that will create a $14 billion investment entity and end decades of cross-shareholding between the two ASX-listed companies. Read more
Invest
Australian investors plan to boost private market allocations to 45 per cent
Australian institutional investors plan to increase their private market allocations from 39 per cent to 45 per cent within three to five years, according to new research from State Street. Read more
Invest
Mason Stevens appoints former Morgan Stanley executive as chief strategy officer
Wealth management platform Mason Stevens has appointed Peter Mermelas as chief strategy officer to lead the company's expansion into the ultra-high-net-worth segment. Read more
Invest
Good Return launches $10 million fund to support women entrepreneurs across Asia-Pacific
Social purpose organisation Good Return has launched a second Impact Investment Fund targeting a $10 million capital raise to support women-led businesses in developing Asia-Pacific economies. Read more
Invest
Australian investors flock to US stocks and crypto after Trump victory
Trading volumes in US equities surged 20 per cent on Australia's second-largest share trading platform following Donald Trump's election victory last month, as local investors sought to capitalise on ...Read more
Invest
Digital finance innovation could deliver $19 billion annual boost to Australian economy
Digital finance innovation has the potential to deliver $19 billion in annual economic gains to Australia, according to new research from the Digital Finance Cooperative Research Centre. Read more
Invest
Echelon completes $400,000 acquisition of Northern Territory gas permit
Echelon Resources has completed the acquisition of a 100 per cent interest and operatorship in Exploration Permit EP145 in the Amadeus Basin, Northern Territory, for $400,000. Read more
Invest
Institutional investors return to risk-taking as tariff fears ease
Institutional investors moved back towards risk-taking in late May following delays to trade tariff implementation, according to State Street's latest Institutional Investor Indicators. Read more
Invest
Soul Patts and Brickworks plan $14 billion merger to create investment powerhouse
Soul Pattinson and Brickworks have announced a proposed merger that will create a $14 billion investment entity and end decades of cross-shareholding between the two ASX-listed companies. Read more
Invest
Australian investors plan to boost private market allocations to 45 per cent
Australian institutional investors plan to increase their private market allocations from 39 per cent to 45 per cent within three to five years, according to new research from State Street. Read more
Invest
Mason Stevens appoints former Morgan Stanley executive as chief strategy officer
Wealth management platform Mason Stevens has appointed Peter Mermelas as chief strategy officer to lead the company's expansion into the ultra-high-net-worth segment. Read more
Invest
Good Return launches $10 million fund to support women entrepreneurs across Asia-Pacific
Social purpose organisation Good Return has launched a second Impact Investment Fund targeting a $10 million capital raise to support women-led businesses in developing Asia-Pacific economies. Read more
Invest
Australian investors flock to US stocks and crypto after Trump victory
Trading volumes in US equities surged 20 per cent on Australia's second-largest share trading platform following Donald Trump's election victory last month, as local investors sought to capitalise on ...Read more
