12th May 2015
Investors are being urged to review their portfolios in response to the global bond market sell-off.
The message from Nigel Green, deVere Group’s founder and chief executive, comes as the woes surrounding government bonds prompt wider market volatility.
While Green cautions investors to be vigilant about ways in which their holdings might suffer, he points out that the sell off also provides opportunities.
Green says: “It is still too soon to say if this is the start of the bear market in bonds that some analysts have been forecasting for the last couple of years.
“Unsure if this is a blip or not, now is not the time for hasty decisions. Now is the time for investors to review their portfolios, to be vigilant, and to seek out the potential opportunities with a good adviser.
“Whenever there is a fall-out, or periods of heightened market turmoil, there will always be opportunities for investors and it’s up to financial advisers to seek out the right ones for their clients.”
He adds: “Bonds have had an overdue correction in some countries, whilst other countries appear to have had a more knee-jerk reaction.
“We could indeed have reached a turning point for the bond market, but investors shouldn’t react with haste at this point.”
John Wyn-Evans, head of investment strategy at Investec Wealth & Investment adds: “It has long been our opinion that, at the asset class level at least, UK markets will be more affected by global than domestic trends and influences.
“This has been especially evident in recent days in the bond market, with profit-taking in German Bunds sparking extraordinary moves in all developed market bonds. It is a similar story for global equities, where investors are grappling with the recent moves in currencies and inflation expectations as well as the jump up in bond yields.
WWe don’t envisage this as being worse than a short-term correction, especially with the amount of liquidity being provided by central banks in Europe, Japan and to some extent China. We see further gains ahead for equities, but the summer promises continued volatility.”