Three investment reasons to be cheerful amid economic upheaval

1 min read

As the world faces the worst economic downturn since the Great Depression and many people are going through extremely hard times, we also need to focus on the compelling positives there are now to create, build and safeguard money to reach our financial goals, says the chief executive of a leading financial advisory group.

“The world has changed considerably in the first quarter of 2020. Coronavirus has sparked a truly global crisis like no other, with a horrifyingly high and tragic number of human lives lost,” said Nigel Green, founder and CEO of deVere Group.

“It has also been a monstrous source of economic upheaval and uncertainty for households, businesses and governments. But in these most unusual of times, it’s essential to seek the positives and there are increasingly significant reasons within the market to be cheerful.”

The International Monetary Fund (IMF) projects global growth amid the COVID-19 pandemic in 2020 to fall to -3%. This is a downgrade of 6.3 percentage points from January 2020, clearly a significant downward revision within a very short time period.

Looking beyond the gloom, Nigel Green said that many investors are using these to create, build and safeguard their money right now, and yet, there are three main investment reasons to be cheerful.

“First, the market is cheap by historic standards and this represents a major, perhaps once-in-a-generation chance to buy top quality equities at lower prices to bolster investment portfolios.  History shows that stock markets always go up over time.

“Second, the worldwide loosening of monetary and fiscal policies.  This will serve as a bridge for economies until the crisis passes and will go a long way to boost both supply and demand across all sectors. In turn, this will lead to more investment, increased confidence, and longer-term job and wealth creation.

“Third, pent-up demand will hit the global economy when lockdowns are lifted. Many people have not lost their jobs or suffered reduced incomes and have saved money during the lockdown. We can expect demand in sectors such as autos, travel, hospitality and entertainment to be strong.”

Whilst some investors appear to have not only locked down themselves, but also their financial strategies, increasingly both retail and institutional investors are “rightly looking beyond only the dark picture,” said Green.

“No economy – developed or emerging – has been spared this downturn, the worst since The Great Depression. The uncertain economic landscape is impacting on people’s lives and livelihoods,” concluded the deVere CEO.

“However, I also would urge investors to mitigate risks to their money and help create and grow wealth by looking towards the undeniable and compelling positive areas amid this tragic and unprecedented global situation.”