Investors should see the global sell-off as a wake-up call

Inflation worries rattling stock markets across the globe should be used by investors as a reality check.

On Tuesday we saw the pan-European Stoxx 600 index drop 2.3% and London’s FTSE 100 fall 2.4%.

European losses followed on from the Asia Pacific region, with Hong Kong’s Hang Seng closing more than 2% lower and Japan’s Nikkei 225 ending the Tokyo trading session having lost more than 3%.

In addition, U.S. futures were down across the board ahead of the opening bell in New York.

Of course, as I was quoted by The Guardian, Yahoo Finance and The Hill, amongst others, a rise in prices and supply shortages is to be expected as economies re-open and demand is unleashed by businesses, households and whole industries.

Following the coronavirus crisis, we’re now at a point of huge readjustment, which is driving fears that mounting inflation will lead central banks to tighten monetary policy which will affect asset prices.

It’s this very scenario that is shaking markets and triggering a global sell-off.

Although tech shares are bearing the brunt of the sell-off, this will be used as an opportunity.

Naturally, as our daily lives become increasingly digitalised, at lightning speed, tech will remain one of the investment mega-trends for the foreseeable future.

Shrewd investors will be attracted to the massive growth offered by tech, and as such, this latest sell-off will be viewed as a buying opportunity.

Nobody truly believes the future isn’t online.

Consequently, investors should be selective about this sell-off.

As some of the heat is being taken out of the markets, with certain stocks far too high, investors are more likely, perhaps more prudently than they have previously done, to make the most of this dip.

With history showing us that stock markets typically tend to rise over the longer-term, many investors will be seeking out the buying opportunities in the near future.

Click here for my YouTubeLinkedIn profile and Twitter accounts.

Your comment

Your email address will not be published. Required fields are marked *

Financial Health Quiz

Discover your financial well-being with the Financial Health Quiz.

In just 2 minutes, assess your finances, get personalized results, and actionable steps – all for free.

Take the quiz

Get the latest from Nigel Green