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Written by: Nigel Green | deVere Group
This summer won’t be business as usual for investors. Thin liquidity, surging inflationary pressure, geopolitical risk, and debt concerns are converging into what can only be described as a perfect storm.
For financial advisers and investment professionals, this isn’t a time for platitudes or passive reassurance, it’s time to lead.
Clients are reading headlines about trade wars, tariff escalations, and bond market dysfunction. They’re seeing sharp swings in their portfolios, and some are questioning their strategy.
Our job is to provide perspective, reframe the noise, and help them stay both calm and opportunistic.
The seasonal lull in market participation during the summer months often creates exaggerated price movements. This year, it will be amplified. Lower trading volumes mean faster selloffs – but also quicker rebounds for those who are well positioned.
This dynamic needs to be explained clearly: volatility works both ways. It’s not something to hide from; it’s something to use.
That starts with a proper understanding of inflation. Many clients assumed it had been tamed. But we’re seeing renewed upward pressure – and not just from energy prices or supply constraints.
Protectionist policies are intensifying costs across borders. A tight labour market, especially in the US, is adding further wage inflation.
The result is an environment where interest rates are unlikely to fall soon. Higher-for-longer rates mean ongoing stress for rate-sensitive stocks and sectors. At the same time, the bond market is flashing warning signs.
As global demand for US debt softens – especially from major foreign holders – yields are climbing. This will put further pressure on equity valuations and fixed income returns alike.
So, how should we be advising clients?
First, acknowledge the uncertainty. Pretending this is a minor blip erodes trust. Instead, help clients understand that markets are supposed to reflect risk, and right now, there’s a lot of risk to price in. This doesn’t mean panic, itt means strategy.
Second, refocus attention on positioning. This is the season to rebalance, not retreat. Portfolios that were built for a different inflation and rate regime need to be reassessed. Cash isn’t safe when inflation is climbing. Bonds aren’t risk-free when demand is waning. And growth stocks need selectivity when valuation pressure increases.
Third, highlight long-term upside. Beneath the surface volatility, there are powerful forces reshaping the investment landscape.
AI is not hype; it’s accelerating productivity, cutting costs, and driving margin expansion in forward-looking firms. Clean tech is becoming more commercially viable with each passing quarter. These are long-term trends that require long-term conviction.
Fourth, use this moment to revisit geographic exposure. The US-China standoff is no longer a trade disagreement, it’s an economic confrontation with global spillovers. A more diversified international allocation is not just wise; it’s essential.
Finally, stay invested. Markets don’t send invites before they rebound. The pivot from tightening to easing will come – and those already positioned will benefit most. Trying to time that shift is a losing game. Staying disciplined, diversified, and alert is far more effective.
This summer will test portfolios – and advisers. But it also offers a window to demonstrate real value. Being a guide through turbulence isn’t about having all the answers.
It’s about keeping your clients focused on what matters, making adjustments when needed, and reminding them that the biggest opportunities often appear when others are distracted by fear.
Related: Why Now Is the Moment for Small Caps: Outperformance Ahead?