Investment market volatility is ‘here to stay’ unless global recession strikes: analyst
Wealthy investors should be ready for higher volatility “for years” as uncertainties around artificial intelligence (AI) development and geopolitical risks are set to persist, according to a major private bank. In the past few years, asset prices underwent several roller coaster rides, from US Liberation Day last year to the sell-off of semiconductor shares and US Treasury in recent months. But…
Major private bank analyst Julia Wang warns wealthy investors to brace for higher market volatility for years to come due to uncertainties surrounding artificial intelligence development and geopolitical risks. This unpredictability has been ongoing since the market structure changed over the years and is expected to persist, unless a global recession occurs.
Wang, who joined Nomura International Wealth Management as their North Asia chief investment officer last year, suggests wealthier clients should be prepared for prolonged volatility and consider diversifying their asset portfolios. AI-linked market fluctuations have led to roller coaster rides in asset prices, with semiconductor shares as a prime example.
After reaching a record high in late June, the Korea Composite Stock Price Index saw a 22 percent drop last month, causing hedge funds to pull back and rotate into defensive stocks like utilities and healthcare. Wang also highlights the potential risks of geopolitical fragmentation and policy uncertainties, which could dampen gains from offshore investments and contribute to higher inflation rates.
Despite these challenges, Wang maintains a positive outlook on AI and the global economy, urging investors to focus on corporate fundamentals to navigate market volatility successfully.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
