Written by: George Prior
Fortunes will be made in this current bear market as in-the-know investors use the 20% drop as a major buying opportunity, affirms the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.
The observation by Nigel Green of deVere Group, a game-changing financial services giant, comes as the S&P 500, Wall Street’s main stock index, shed 3.9% on Monday. The index fell another 0.5% on Tuesday and is now 22% below its record set early this year and now officially in a bear market.
Other major stock markets around the world have also been experiencing sell-offs in recent days and weeks too.
Bitcoin, the world’s largest cryptocurrency, has also lost nearly 30% of its value in just seven days, weighing on the broader digital currencies market.
A bear market is the term used to describe the plummeting of financial markets by 20% or more from their most recent all-time high.
The deVere chief executive says: “Fears about possible recessions have tanked stock markets around the world amid reports that the U.S. Federal Reserve – the world’s most influential central bank - could raise interest rates by as much as 0.75% on Wednesday, which would be its biggest single hike for nearly 30 years.
“There’s huge uncertainty right now – which markets loathe – and this, of course, is creating mass anxiety amongst investors.
“And away from markets, people are rightly worried about how this will all translate as companies seek to cut costs, jobs and investment as they experience a painful cost of living crisis not seen for decades.
“This can be highly stressful, and a financial adviser can help people navigate choppy waters.”
He continues: “In this volatile environment, I would urge investors to stay invested in the market - do not sell unless you urgently need the money - and to ensure your portfolios are properly diversified, which is your best way to mitigate risks and reap rewards.
“Your future self will thank you. The average bear market lasts less than a year and they typically rebound stronger than before.”
Nigel Green, a serial investor and entrepreneur, says that long-term investors will be using the downturn as an opportunity.
“History and recent data teach us that bear markets are usually major opportunities to build wealth for investors who top-up their portfolios with quality stocks at lower prices.
“The panic-selling of the last few days has created some important long-term opportunities with high upside potential and low risk possibilities for those who buy judiciously.
“There’s no doubt that some fortunes will be made in this bear market, like in others before.”
The last bear market was in 2020, but it was unusually short as it only lasted about a month. The current one is likely to be longer due to the slew of contributing factors that are fuelling it.
The deVere CEO concludes: “Despite the panic, bear markets have historically been optimal times to build wealth for savvy investors.
“But this is not the time to dabble in DIY investing or financial planning. Advice is your best friend right now."