Mark Harris, head of multi asset at City Financial also sees the chance to boost returns.
“Recent activity in markets has opened up a range of interesting opportunities and we look forward to taking advantage,” he said. “There appear to be a number of disconnects priced into different asset markets that will have to be resolved at some stage. High yield markets offer excellent opportunities following their spread widening over 2015 but may face threats in the second half of the year if US growth slows. Dividend growth will be a very rewarding equity style for 2016 in most equity markets.”
“In the meantime we see that most central banks are likely to extend stimulus and usually this has positively impacted asset prices. European equities look likely to benefit most as they still offer some value and should be supported by few inflationary pressures and a supportive central bank.”
Of course, there is a possibility the doom merchants are right and we are about to see a vast sell off comparable to 2008, in which case everybody will get caught out by the magnitude and breadth of the slide regardless of strategy and asset allocation.
There are however vast differences between the sub-prime property triggered crisis of 2008 and the factors at play in global markets today, so it is not directly comparable.
A major slide, without the immediate bounce back which has been seen in the mini-crashes of recent times could come, but if you feel comfortable that is not likely then the current level of volatility and panic means big profits could be there for the taking for the savviest investors.
