Written by: George Prior
Right now the world is facing the worst economic downturn since the Great Depression and many people across the world are going through extremely hard times.
But we also need to try and focus on the compelling positives there are now to create, build and safeguard money to reach our financial goals for ourselves and our loved ones.
The message from Nigel Green, founder and CEO of deVere Group, one of the world’s largest independent financial advisory organisations comes as the International Monetary Fund (IMF) projects global growth in 2020 to fall to -3 per cent. This is a downgrade of 6.3 percentage points from January 2020, clearly a significant downward revision within a very short time period.
Nigel Green comments: “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.
“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.
“Looking beyond the gloom, many investors are using these to create, build and safeguard their money right now.”
He continues: “I believe that 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,” says Mr Green.
The deVere CEO concludes. “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.
“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."