Financial markets are likely to rally in November and December, despite recent corrections and weak investor sentiment, predicts the CEO and founder of a leading independent financial advisory and fintech.
“History shows that November is the second-best month of the year for markets, behind April,” said deVere Group’s Nigel Green.
“This November could be even more positive as some markets are currently in correction territory – falling by more than 10% – and so a swing to the upside will be more pronounced.”
The deVere CEO added that, “over 72 years, there have been 34 market declines. Only 12 of these turned into bear markets. When does a recovery typically happen? 96 days after the start of the correction. We’re now around day 90.
“If this data holds up, we’re about to see a year-end rally, which investors would not want to miss out on.”
In addition, Green said he expects the Federal Reserve will leave US interest rates unchanged this week.
Fed to hold rates
“Investors will be watching this carefully, but the central bank of the world’s largest economy is almost certainly going to hold rates steady on Wednesday, which will be bullish for stock markets.”
Should markets emerge from correction territory, investors should consider a few prudent strategies, he said.
First and foremost, maintaining a diversified portfolio remains crucial, as it helps spread risk and minimise exposure to sector-specific fluctuations. Reassess your investment goals, risk tolerance, and time horizon to ensure your portfolio aligns with your financial objectives.
Sectors that could appeal to investors, as markets recover, include tech and renewable energy. These have demonstrated resilience and potential for growth even during market downturns.
Additionally, consider allocating funds to undervalued industries that may benefit from economic rebounds, such as travel and leisure, as pent-up consumer demand surges.
Lastly, monitoring the broader economic and geopolitical landscape is vital for informed decision-making, as global events can significantly impact market dynamics. Diversification, research, and a strategic outlook are key as markets exit correction territory.
The deVere CEO concluded that, “we expect a rally for the end of 2023. You should consider revising your investment mix to seize the potential opportunities in what may be a new phase.”
