Adopting a contrarian approach, more than half of investors plan to buy more stocks before 2022 ends, even with market unpredictability, a new report shows. Nigel Green, head of one of the world’s largest financial advisory, asset management, and fintech firms, cautions that those who make investments must do so carefully, to avoid over exposure.
Green is the CEO of deVere Group, with roughly $12 billion under advisement. Per a news release, a poll of over 700 clients revealed that 56% are seeking to add more equities to portfolios this year. Those polled live in North America, the UK, Europe, Asia, Africa, the Middle East, and Latin America.
“The poll’s findings show that retail investors are not behaving as you might expect,” he stated.
“A jittery start to the year for stock markets got even worse last month, with most major indexes coping with major bouts of volatility.”
Green noted the stock benchmark S&P 500 ended the first half of the year down nearly 21%, the most dramatic first-half “shedding” in over five decades.
“However, investors are shrugging off the bearish sentiment and are preparing to top-up their portfolios.”
This is viewed as good news by people thinking about the long term.
“They see that the recent panic-selling has created some important long-term opportunities with high upside potential and low-risk possibilities. Sensibly, they are not only remaining fully invested but they are looking to build their investments.”
Still, Green cautions those seeking more exposure to equities.
“Stepping off the sidelines to enhance your investment portfolios is to be championed, but you must also ensure that those bolsters help to create resilience and dynamism. You must buy wisely in this current volatile, high inflation environment.”
He suggested investors be mindful that long-term and short-duration assets respond differently to rising inflation and interest rates. He added investors should be considering “less familiar, return-enhancing asset classes which could include venture capital, structured products, cryptocurrencies, high dividend stocks, hedge funds and managed futures, and real estate, amongst others.”
“Building your investments is, clearly, the best way to grow your long-term wealth. But don’t get carried away with one asset class.”
“Diversification remains your best tool to reach your financial objectives.”