The ECB’s commitment to further stimulus will be used by rational investors to expand their portfolios, affirms the chief executive of one of the world’s largest independent financial advisory organisations.
The observation from Nigel Green, deVere Group’s CEO, comes as Mario Draghi, president of the European Central Bank (ECB), today announced additional stimulus measures aimed at boosting Eurozone economic growth.
Mr Green comments: “The stimulus measures will, undoubtedly, receive a chorus of criticism by some theorists. However, it is likely that many rational investors’ focus and approach will be different. They will use the ECB’s latest announcement of further stimulus measures as a catalyst to expand their investment portfolios.”
He continues: “They will be keen to top up their portfolios now because there are high quality equities to be had at bargain prices – indeed, in some sectors, stocks have reached 2009 levels, although the underlying economic environment has improved – and because the ECB is willing to take bold additional steps to encourage sustainable growth in the Eurozone, thereby increasing investor confidence and making those buying opportunities look even more appealing.
“It is our experience that many investors have been increasing their contributions to portfolios since the beginning of the year due to the attractive prices of decent stocks and because they’re aware that stock markets perform well over the long term, allowing them to accumulate wealth. We can expect that the new ECB stimulus announced today will further boost this trend.”
Mr Green goes on to say: “A key advantage of the ECB announcement is that it is likely to encourage geographical diversification amongst global investors. The greater diversification that is achieved by an international spread, the greater the reduction of overall risk to the portfolio and the greater the chance the investor will be best-placed to take advantage of upsides when they’re presented.”