Stock markets are likely to stabilise in the coming weeks, following a fortnight of turbulence, and investors should consider building their wealth with currently undervalued equities, according to a leading financial advisor.
“As Russia amassed 150,000 troops on Ukraine’s border, concerns of a war in eastern Europe, together with soaring inflation and the high probability of several hikes in interest rates, stocks have taken a bit of a beating in recent weeks,” said Nigel Green, chief executive and founder of deVere Group.
“However, reports of a potential summit in the coming weeks between U.S. President Joe Biden and Russia’s Vladimir Putin to deescalate tensions in Ukraine, combined with positive economic growth data coming from multiple major economies, is going to have a stabilising effect on markets,” he said.
The financial advisory and fintech CEO said investors should seek to top-up their portfolios with high-quality equities ahead of a potential rebound, as optimism becomes the more dominant sentiment.
“In-the-know investors understand that they should not only be staying in the market, but that now would be the time to act to further bolster their positions.”
Green’s bullish comments followed the rise in U.S. futures on Monday on news of the Biden-Putin summit, European stock markets trading up, the German economy reported to be growing at its fastest rate in six months, and business activity in the UK and France recording their strongest since June.
“We’ve had a period of market jitters and nervousness – and we’re still in it. For now. Investors should be taking advantage of current lower values to enhance their portfolios for the longer-term growth of their wealth.
“When used effectively and efficiently, a bit of volatility can be an extremely powerful investment strategy.”
The deVere CEO concluded that, “right now investors should not only be sitting on the sidelines and remaining invested in the market.
“They should also now be bolstering their portfolios, using sound investment decisions based on fundamentals such as diversification, growth potential, sensible valuations and profitability.”