Experiences from previous economic downturns indicate there is still a lot of recovery potential for markets in the coming years but stock selection remains a crucial consideration, according to Fidelity International Australia head of Australian equities Paul Taylor.
"If the previous market downturns are any guide to there are still significant opportunities from this recovery," he said.
But while the recovery would deliver some very good investment opportunities, it does not mean every stock on the market will be worth buying.
"Just because the market has great long-term value doesn't mean you can just buy any stock. Stock selection as always is critical," Taylor said.
Fidelity is currently looking for investment opportunities where the company has an attractive valuation, a strong balance sheet, a good management team and a good industry structure.
"Importantly we are looking for companies that are growing their market share through this environment, companies that are going to come out of this environment in much better shape than when they went in," Taylor said.
The industry sectors for Australian equities Fidelity favours at the moment include both staple and discretionary consumer goods, industrials, and energy, according to Taylor.
Fidelity is also holding an overweight position in diversified financials but were underweight in property, he said.
