Investors should brace themselves for several headwinds as they move into the second half of 2020, deVere Group CEO Nigel Green has warned.
A top concern for investors will be international relations with China. Simmering trade tensions with the US, China’s culpability in the coronavirus pandemic and international condemnation regarding Beijing’s crackdown on Hong Kong’s independence will all have a huge bearing on the relationship developments between China and the rest of the world and could have potential repercussions on investment decision making, according to Green.
Other areas of concern for investors include the easing of Coronavirus lockdowns and the reopening of society which could cause an acceleration in new infections, and the uncertainty surrounding the US Presidential election as the world readjusts following the global fallout of Coronavirus.
Green also believes the risk of a no-deal Brexit for the UK, EU and global economies could hamper investment returns, with the UK so far not withdrawing from its threat to walk away without a trade agreement in place.
Green says: “On the very first day of this new decade, the media reported for the first time on an outbreak of viral pneumonia in the Chinese city of Wuhan. Six months on and Covid-19 has changed the world forever.
“We’re in a new era and this will, of course, have potential repercussions on investment decision-making as we move into the second half of this most unusual of years.
“As investors, we should brace ourselves for more headwinds, which are likely to drag on growth and returns, than tailwinds, which enhance growth and help fuel positive returns.”
However, Green says there is positive news for investors, with governments and central banks around the world continuing to provide considerable levels of stimulus to support economic recovery and the rise of fintech creating more opportunities for people to save and invest for their future at reduced costs.
“There are challenges as well as major opportunities ahead for the second half of 2020. Investors should remain invested because history teaches us that markets go up over the long term.
“In addition, investment portfolios must be adequately diversified across asset classes, sectors, regions and currencies. This is the investor’s best weapon to capitalise on the opportunities and sidestep risks.”
