Invest
Risk assets a risky business in 2020
Risk assets around the world will be vulnerable to a deterioration in investor sentiment in the coming year, an investment strategist has warned.
Risk assets a risky business in 2020
Risk assets around the world will be vulnerable to a deterioration in investor sentiment in the coming year, an investment strategist has warned.
The chief strategist at Principal Global Investors, Seema Shah, has cautioned that the “significant disconnect between elevated valuations and only modest economic growth” has led to the forecast.
As a result, she is urging investors to maintain some defensive and nimble positioning in their portfolios as prospective returns are likely to be lower than they were last year.
Concerns she flagged as affected by sentiment include the “risk of a ‘shock’ outcome in the US presidential elections later this year, a fragile US–China trade agreement, bad-tempered US–Iran relations, potential for renewed Brexit risks as well as recent concerns of a virus outbreak”.
Despite this concession, Ms Shah has touted the benefits of emerging markets for investors in the year ahead, with stronger returns likely to be found in such regions.
“Emerging market valuations are more attractive, while their economies (especially emerging Asia) will be supported by the lifting of US–China trade tensions, a slightly weaker US dollar and policy space for further rate cuts,” she explained.
But she did counter that investors will need to carefully pick their allocations if they do take the emerging market route.
“The merits of active management in emerging markets will be clear, as geopolitics and domestic political hotspots are likely to create clear winners and losers,” the chief strategist continued.
“Markets will likely penalise governments who reflate their economies without regard for already sizeable debt piles and/or inflationary risks.”
RELATED ARTICLES
About the author
About the author
Shares
DREST gears up for innovation with the appointment of new co-CEO and CTO
Luxury fashion and lifestyle mobile game DREST has announced significant leadership changes as it prepares for an exciting phase of development and expansion. Read more
Shares
Hope for investors scared by share and crypto crashes
As share markets and cryptocurrency take a beating following the tightening of monetary policy across the world, investors are contemplating their next move. Read more
Shares
Cannon-Brookes tries to block AGL demerger
Mike Cannon-Brookes is not giving up on AGL after the latter announced 15 June as the date of the demerger vote. Read more
Shares
Qantas set to acquire Alliance Aviation
The two airlines have entered into a scheme implementation deed. Read more
Shares
Bond and share investors may shrug off RBA’s rate hike
As mortgage holders reel from the prospect of having to reach deeper into their hip pockets to make bigger repayments following the Reserve Bank of Australia’s (RBA) interest rate hike from 0Read more
Shares
How to buy Shares: A beginner’s guide in 2022
So you want to get in on the stock market action? Congratulations, that’s an exciting step! But first, there are a few things you should know before you buy your first shares. Read more
Shares
Elon Musk chokes up on bid to swallow Twitter
The battle of the bird has intensified over the last week, as Tesla and SpaceX founder Elon Musk has ramped up his aggressive campaign to buy the entirety of social media giant, Twitter. Read more
Shares
How to Make Money in Short Selling
What is short selling? There is a common practice for people who actively trade in the stock market, which is to “buy low and sell high”, but what if you can still make money by doing the opposite? Read more
Shares
DREST gears up for innovation with the appointment of new co-CEO and CTO
Luxury fashion and lifestyle mobile game DREST has announced significant leadership changes as it prepares for an exciting phase of development and expansion. Read more
Shares
Hope for investors scared by share and crypto crashes
As share markets and cryptocurrency take a beating following the tightening of monetary policy across the world, investors are contemplating their next move. Read more
Shares
Cannon-Brookes tries to block AGL demerger
Mike Cannon-Brookes is not giving up on AGL after the latter announced 15 June as the date of the demerger vote. Read more
Shares
Qantas set to acquire Alliance Aviation
The two airlines have entered into a scheme implementation deed. Read more
Shares
Bond and share investors may shrug off RBA’s rate hike
As mortgage holders reel from the prospect of having to reach deeper into their hip pockets to make bigger repayments following the Reserve Bank of Australia’s (RBA) interest rate hike from 0Read more
Shares
How to buy Shares: A beginner’s guide in 2022
So you want to get in on the stock market action? Congratulations, that’s an exciting step! But first, there are a few things you should know before you buy your first shares. Read more
Shares
Elon Musk chokes up on bid to swallow Twitter
The battle of the bird has intensified over the last week, as Tesla and SpaceX founder Elon Musk has ramped up his aggressive campaign to buy the entirety of social media giant, Twitter. Read more
Shares
How to Make Money in Short Selling
What is short selling? There is a common practice for people who actively trade in the stock market, which is to “buy low and sell high”, but what if you can still make money by doing the opposite? Read more
