While the coronavirus crisis is rattling the markets, there are some opportunities for canny investors
The volatile markets can send investors running for the hills but others know that in times of crisis there is always opportunity.
As the world battles with the dual challenges of public health and economic crises, while many investors are focusing on traditional safe havens such as gold, others are picking up ‘new world’ investments.
“Every economic downturn creates a new normal. The one being triggered by the coronavirus pandemic will be the same,” said Nigel Green, CEO of global financial advisory deVere Group. “The Covid-19 impact has hit firms across the world – there’s been immense international disruption - with many sectors experiencing major issues of supply, demand, or both.”
But aside from those suffering, some industries are actually benefitting from the COVID-19 pandemic, as evidenced by rise for the tech-heavy Nasdaq while other bourses have faltered.
“New industries will come into their own and, as ever, there will be winners and losers. This will mean job losses in some sectors and huge - possibly unprecedented - job and investment opportunities in others,” added Green.
Fueling the FAANGs
Green believes that the forced changes to the way we live will accelerate the ‘Fourth Revolution’ and see new technologies rise quickly. This will include areas such as artificial intelligence and mobile supercomputing.
“Big tech is just one likely winner. The likes of Apple, Facebook, Amazon, and Google’s parent company Alphabet have immense cash reserves to continue, maybe even bolster, research and development and to sustain their business operations,” he said.
Social distancing and self-isolation will drive demand for these companies but other industries are also set for rising demand.
“These include pharmaceutical and healthcare firms, delivery brands, supermarkets and manufacturers of electronic goods, such as fridges and freezers,” Green continued.
Eventually, the coronavirus pandemic will end. Then what?
“Of course, there will be a recovery from the global economic impact of coronavirus. But the world has already changed as a result of it - and will do so more - and savvy investors are aware of this new normal and are already readjusting their portfolios accordingly,” Green acknowledged. “Times of immense tumult can be times of great ingenuity, promise and opportunity.”