It's not the pandemic and it's not climate change, so what are investors most concerned about right now?
There’s plenty for investors and their financial advisors to be concerned about right now with analysts expecting further market volatility ahead.
But one thing has emerged as the main cause for worry.
A new survey of 735 clients of global financial advisory deVere Group shows that the result of November’s US presidential election is a bigger concern than a second-wave of the COVID-19 pandemic or the ongoing risk from climate change.
Specifically, the prospect of a disputed result in the election is concerning 72% of respondents, a far higher share than the 18% who fear a resurgence of the virus.
Another 5% are worried about US-China trade and a similar share is concerned about other issues including Brexit.
The poll involved respondents in UK, North America, Europe, Asia, Africa, Latin America, and Australasia.
Freaking out
deVere Group CEO and founder, Nigel Green, says that investors are “freaking out” at the prospect of a contested election result.
“President Trump is already questioning the legitimacy of the election, heightening the chances of a contested result and an ensuing constitutional crisis in the world’s largest economy,” he said.
“It’s getting ugly and investors are, rightly, concerned that this will generate massive waves of volatility in the markets, not only in the U.S., but around the world.”
Green says that despite the high likelihood of volatility, investors should stay in the market as things should settle down with a few weeks.
In fact, he says building up portfolios is the right move for two important reasons.
“First, are long-term benefits. There are many unknowns, but what we do know is that over the longer-term the performance of stock markets is fairly predictable: they go up,” he said. ““Indeed, for this reason, over a longer time horizon, investing in equities is almost universally recognised as one of the best ways people can accumulate wealth.”
Green said that by not topping up and diversifying portfolios in volatile periods, investors are losing out on the long-term benefits that investing now offers.
And his second reason for being active in the market now, is the buying opportunities.
“The see-sawing markets are a chance for investors to put new money into markets at lower prices. A slump in the market means that there are high-quality equities available at more attractive prices,” he added.
