Investors who have been “paying attention” have been topping up their investment portfolios and will continue to do so, according to the CEO of a leading financial advisory and fintech organisation.
The comments from Nigel Green, the chief executive and founder of deVere Group, which has $12 bln under advisement, come as stock markets around the world further rallied on Tuesday after the U.S. Federal Reserve announced an expansion to its historic stimulus programme.
“Global stocks have been buoyed by the news from the Fed – the world’s de facto central bank – to buy individual corporate bonds in addition to the exchange-traded funds it is already purchasing, to support the world’s largest economy,” Green said.
“This extra stimulus acts as a ‘backstop’ or ‘floor’ for equities.
“The additional Fed support was widely expected by the markets and therefore, investors who have been paying attention have been topping up their investment portfolios recently as entry points will inevitably continue to go higher as we move forward.”
Green explained that it is likely savvy investors will continue to enhance portfolios as the backing is likely to be maintained for years, not quarters.
“Also, it has been reported that President Donald Trump’s administration is preparing to unveil a $1 trillion infrastructure package. This will further boost asset prices.”
The deVere chief executive called the additional measures last week.
“Further stimulus can be expected from the Fed – and also perhaps from Congress too – in the near future… This will support and likely boost asset prices moving forward. Investors will now be eyeing the opportunities before any fresh or enhanced stimulus packages are announced,” Green had noted on June 11.
London’s FTSE 100 and Frankfurt’s Dax both jumped 2.2% in morning trading on Tuesday, while the pan-European Euro Stoxx 600 gained 2%. U.S. futures markets suggested that U.S. stocks would rise further when trading begins on Wall Street, with S&P 500 futures up 1%.
In Asia-Pacific, Tokyo’s Topix shot up 4% and Australia’s S&P/ASX 200 gained 3.9%. Meanwhile, Hong Kong’s Hang Seng rose 2.4%, while China’s CSI 300 index was 1.5% higher.
“Few things can fuel markets like another stimulus injection,” Green concluded.
“The message investors are taking away is that the U.S. central bank and government are prepared to do whatever it takes to support the recovery.”