Nigel Green, chief executive and founder of deVere Group has made the comments as a number of experts have conceded a coronavirus-triggered world recession is likely, while governments and central banks scramble to limit the impact.
Mr Green noted both global supply and demand are set to be impacted, but his focus is on how the recession will produce a “new world”, like its predecessors.
“We can expect this recession to be deep but short. The slowdown will be temporary because it’s not caused by deep-rooted problems and imbalances in the economy, rather by a wholly unexpected shock that’s gripped the world,” he said.
“A COVID-19 recession is likely to fundamentally shift how we live, do business and invest.”
On Sunday, the US Federal Reserve made its second emergency interest rate cut to 0 per cent, following its decrease last week. Mr Green commented the US central bank could soon join its peers in Europe and Japan by adopting negative interest rates.
“Zero or negative rates will help boost financial asset prices and savvy investors will be seeking to top up their portfolios by drip-feeding new money into the market at this time,” he said.
“They will give more investors more reason to increase their exposure to equities as the money won’t be working for them as cash deposits.”
He also believes the coronavirus outbreak will speed up the “fourth revolution”, with new technologies such as artificial intelligence and mobile supercomputing. Mr Green’s advice for investors to protect and build their wealth is to revise their portfolios to mitigate risk and take advantage of new opportunities.
“The disruption and shifts will underscore that we live in a time of great capabilities and great promise. New industries will emerge and, of course, there will be winners and losers,” Mr Green said.
“This will mean job losses in some sectors and huge, possibly unprecedented, job and investment opportunities in others.
“Enforced social distancing will highlight how families, friends and colleagues can interact, remain connected and work, how businesses can still efficiently operate, and how investors can manage assets via advancing digital infrastructures.”
