In a stark warning, Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations, advises investors to brace themselves as markets face potential turbulence in the first quarter of 2024, with the possibility of a 20% drop.
As per the information shared with Finbold, despite the gloomy outlook, Green emphasizes that astute investors may find lucrative opportunities amidst the volatility.
Green’s cautionary remarks follow a turbulent beginning to the year for global markets. Losses led by China and Japan rattled the Asia-Pacific region, while European stocks are poised for a mixed opening. In the United States, Wall Street indexes concluded the second session of the year in the red, contributing to the prevailing uncertainty.
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Markets could fall into correction territory this quarter
Expressing concern over the ongoing market unease, Green states, “Global markets have been spooked since the start of 2024, and there’s little sign that volatility will be reduced any time soon amid uncertainty regarding central bank rate cuts.”
The trigger for the current market fluctuations is widely attributed to the minutes of the U.S. Federal Reserve’s December meeting, which hinted at the possibility of interest rate cuts in the coming year without providing a clear timeline.
“With the ongoing lack of clarity from major central banks, including the Fed, we would not be surprised to see markets falling into correction territory this quarter. As such, investors should buckle up for more turbulence,” warns Green.
A correction, defined as a decrease of at least 10% but less than 20% from the most recent high, is viewed as a natural part of market cycles. Green sees potential opportunities in a correction, stating:
“Corrections help markets maintain a balance by preventing excessive speculation and unsustainable price increases. They provide an opportunity for overvalued assets to readjust to more reasonable levels.”
According to Green, corrections offer investors a chance to reassess portfolios, reallocate assets, and position themselves for potential future growth. He notes, “Many see corrections as buying opportunities, especially if they believe the fundamentals of the assets remain strong.”
Concluding his remarks, the deVere CEO states, “The potential for increased market volatility and up to a 20% drop in markets serves as a call for investors to prepare for a bumpy ride. However, within this turbulence lies important wealth-creating opportunities for those who approach the market with a strategic mindset.”