Nigel Green, the chief executive of deVere Group, which has $12bn under advisement, is speaking out after Beijing announced on Friday it will impose new tariffs on $75 billion worth of US goods and resume duties on American autos.
The Chinese State Council said it will slap tariffs ranging from 5 to 10% in two batches. The first on 1 September and the second on 15 December.
Mr Green notes: “China and the US are playing a dangerous game of brinkmanship which will inevitably dent global growth at a time when the global economy is headed for a serious downturn.
“Both sides are getting hurt by the ongoing tit-for-tat trade war and given that they’re the world’s two largest economies its negative impact is far-reaching and intensifying. There’s some serious collateral damage.
“It is likely that there will be further retaliations in the form of tariffs, punitive sanctions on each other’s nation’s firms and, possibly, currency devaluations.”
He continues: “The already volatile markets have been rattled again by today’s news. Investors are getting spooked.
“However, the trade war will likely prove a blip for long-term investors.
“Indeed, investors should embrace some volatility as important buying opportunities.
“Fluctuations can cause panic-selling and mis-pricing. Sought-after stocks can then become cheaper, meaning investors can top up their portfolios and/or take advantage of lower entry points. This all typically results in better returns.
“A good fund manager will help investors seek out the opportunities that turbulence creates and mitigate potential risks as and when they are presented.
The deVere CEO concludes: “Many savvy investors will be using the fall-out of the US-China trade war to generate and build their wealth.”
The analysis from the CEO of the deVere Group comes as investors piled into the Bitcoin and other cryptocurrencies this week amid growing trade tensions between the US and China.
The Chinese renminbi fell to under 7 to the US dollar on Monday – the lowest in more than a decade – igniting drops in stocks and emerging market currencies and driving a rally in government bonds.
Nigel Green, chief executive and founder of deVere Group, notes: “The world’s largest cryptocurrency, Bitcoin, jumped 10% as global stocks were rocked by the devaluation of China’s yuan as the trade war with the US intensifies.
“This is not a coincidence. It reveals that consensus is growing that Bitcoin is becoming a flight-to-safety asset during times of market uncertainty.
“Bitcoin is currently realising its reputation as a form of digital gold. Up to now, gold has been known as the ultimate safe-haven asset, but Bitcoin - which shares its key characteristics of being a store of value and scarcity – could potentially dethrone gold in the future as the world becomes increasingly digitalised.”
He continues: “With the Trump administration now officially labelling China a currency manipulator, escalating the tensions between the world’s two largest currencies economies, investors are set to continue to pile in to decentralized, non-sovereign, secure currencies, such as Bitcoin to protect them from the turmoil taking place in traditional markets.
“The legitimate risks posed by the continuing trade dispute, China’s currency devaluation and other geopolitical issues, such as Brexit and its far-reaching associated challenges, will lead an increasing number of institutional and retail investors to diversify their portfolios and hedge against those risks by investing in crypto assets.
“This will drive the price of Bitcoin and other cryptocurrencies higher. Under the current circumstances, I believe the Bitcoin price could hit $15,000 within weeks.”
The deVere CEO concludes: “Cryptocurrencies are now almost universally regarded as the future of money – but what has become clear this week is that they are increasingly regarded a safe haven in the present.”
Some 55% of respondents of the survey carried out by deVere Group affirmed that they ‘regularly use financial technology to access and manage their money.’
883 people from the UK, Europe, Asia, Africa, Latin America and Australasia took part in the poll.
Of the findings, Nigel Green, deVere Group founder and CEO notes: “Even two or three years ago, that figure would have been significantly lower. The fact that today 55% of people polled globally use fintech solutions on a regular basis highlights the staggering rate of the digitalisation of our everyday lives.
“And it is speeding up. From self-driving cars, genetic bio-editing to AI, new technologies are beginning to impact every part of our lives. Our financial lives are no exception. We’re in a new age.”
He continues: “Fintech firms are filling the void left between what traditional financial services companies are offering and what customers are now expecting, especially in terms of customer experience.
“In broad terms, this means immediate, on-the-go, 24/7 access to, use and management of their money. It means personalised, on-demand services. It means lower costs.
“Fintech is already a major disruptive presence in the financial services marketplace. This trend is only set to grow as ‘digital natives’ - the first generation that grew up with the internet and smart devices – become ever more dominant in the workforce and in social and political roles.”
According to the data collected by deVere, emerging markets in Asia, Latin America and Africa are becoming the biggest growth areas for participation.
“This could be due to fintech typically offering more inexpensive solutions compared to traditional financial services. Also because these areas are home to many of the world’s 1.7 billion unbanked or underbanked population – those who don’t have access to or have limited access to financial institutions – and fintech allows this issue to be overcome,” affirms Mr Green.
Other standout trends: Around two thirds (67%) of those polled used fintech apps to send remittances and money transfers. 46% use financial technology vehicles to track investments and/or accounts. 28% use them for storing and managing cryptocurrencies.
The deVere CEO goes on to add: “Fintech – a major part of the so-called 'fourth industrial revolution' – is a positive force for three key reasons.
“First, it is meeting clear and growing client demand for on-the-go services.
“Second, it is speeding up the advance of financial inclusion across the world. Helping individuals and companies successfully manage, save and invest their money will only result in a better society for us all.
“And third, it gives firms the opportunity to diversify, cut costs, meet regulatory requirements and improve the client experience, which will help build long-term relationships and trust.”
Mr Green concludes: “The poll underscores that fintech is the new normal.”
The estimated 1.8 million British expats living in the EU should consider reviewing their personal financial strategies as ‘no-deal’ Brexit looks increasingly likely, warns the deVere Group.
The warning from James Green, deVere Group’s divisional manager of Western Europe, comes after British Prime Minister Theresa May claimed that a no-deal Brexit “wouldn’t be the end of the world,” as she sought to downplay statements made by Chancellor Philip Hammond.
It also follows the UK government publishing last week its first technical notices advising businesses and consumers on the preparations being done for the prospect of there being no Brexit deal.
Mr Green comments: “A no-deal Brexit is now expected by a growing number of experts and the wider population to be the most likely outcome.
“If the UK crashes out of Europe with no deal in place, the estimated 1.8 million expats living in the EU could be financially impacted in two key ways.
“First, the pound would inevitably suffer and it could fall hard. This would deliver another heavy and serious blow for those who receive UK pensions or income in pounds as the cost of living, in effect, would be significantly more expensive.
“Second, unless there is considerable post-Brexit collaboration between the UK and EU there is a risk that existing payments from British companies, including pension and insurance companies, to those living within the European Economic Area (EEA) could be disrupted or even made impossible. Of course, this would be a major inconvenience to many UK expats.”
He continues: “Against this chaotic backdrop it is prudent that British expats in the EU consider reviewing their personal financial strategies sooner rather than later with a cross-border financial expert. This will help best position them not only to mitigate the risks of a no-deal Brexit, but also to enable them to take advantage of potential opportunities that may arise.”
Mr Green concludes: “Unfortunately, a smooth and orderly exit of the EU is looking increasingly unlikely and this can be expected to hit the finances of many expats.
“They should seek to make their financial strategies ‘no deal Brexit’ proof.”
(Source: deVere group)
The recent sell-off of Bitcoin and other cryptocurrencies was simply a standard market correction, observes the deVere CEO.
The comments from Nigel Green, Founder and CEO of deVere Group, come as Bitcoin – the world’s biggest cryptocurrency by market capitalisation – was close to almost its lowest point of the year two weeks ago and continued its bearish action last week. Other major digital currencies also experienced a sell-off over the last fortnight.
But the crypto market headed back into the green on Monday, posting positive results as the bulls push Bitcoin back on a rally.
Mr Green, whose firm launched the cryptocurrency exchange deVere Crypto at the beginning of 2018, says: “Cryptocurrency markets are subject to volatility more than traditional ones.
“Despite what the doom mongers would want you to believe, the recent sell-off was only ever going to be temporary and prices were bound to rise again relatively quickly – as they are now doing.
"Previous to this sell-off, in recent weeks Bitcoin had experienced a pretty impressive rally, peaking at around $8,300. As such, what happened over the last fortnight was simply a standard crypto market correction.”
He continues: “For many investors, such volatility, of the kind that we saw recently, is used as a welcome buying opportunity.
“They look at the bigger picture. That’s to say, in today’s world, a digital, global currency simply makes sense to them. Or to put it another way, they believe that cryptocurrencies are the future of money.
“Such investors also appreciate that institutional and regulatory support is increasingly inevitable and could happen sooner than many previously expected.
“In addition they are seeing for themselves how more and more global financial institutions, major corporations and household name investors are now working with cryptocurrencies and blockchain, the technology that underpins them.”
Mr Green goes on to say: “Increasingly, savvy investors are aware that what is taking place is a maturation of a relatively new market – hence the highs and lows almost every other week.
“As such, they understand that they either have to buy and take a long-term approach – as is typically the best approach with almost all investing - or be prepared to miss the boat.”
The deVere CEO concludes: “As anyone who has analysed the sector in recent years will know, the dips and peaks are a usual part of the cryptocurrency market.”
(Source: deVere Group)
Trump’s escalation of the trade war is going to trigger a “chain reaction of negative events around the world,” says Nigel Green, the founder and CEO of deVere Group.
This warning comes as global markets are in turmoil as Donald Trump’s administration announced a long list of new products that tariffs on $200 billion worth of goods from China will be levied against.
Mr Green comments: “Trump’s escalation of the trade war between the world’s two largest economies is going to trigger a chain reaction of negative events around the world.
“It is going to lead to higher inflation in the U.S, as import tariffs raise the cost of imported goods while domestic producers find that they can increase their prices as foreign competition weakens. This means interest rates will be hiked and the dollar will go up.”
He explains: “China’s cheap goods have helped keep prices, and therefore US and global inflation, low.
“To counteract increasing inflation, the US Federal Reserve is even more likely to raise interest rates. A jump in rates will, of course, strengthen the dollar.
“A stronger dollar also increases stress in emerging markets, many of which have borrowed heavily in recent years in dollars and who now find interest and capital repayments on these loans have shot up in local currency terms. In addition, emerging markets are particularly vulnerable to a downturn in exports resulting from a rise in quotas and import by the US, given that exports are a key driver of growth for many under-developed countries with China the most obvious example’.
Mr Green goes on to say: “Trump’s trade war is a masterclass in self harm for the US and global economy.”
The deVere CEO stated last week that investors must now avoid complacency and ensure their portfolios are properly diversified to mitigate risks and take advantage of potential opportunities that all bouts of market volatility bring.
He said: “Investors need to brace themselves for months of heightened posturing from the different parties, which is likely to increase market turbulence.
“And as Trump potentially marches off to a trade war, a good fund manager will help investors sidestep the risks and embrace potential opportunities.”
(Source: deVere group)
Investors should expect an increase in market volatility and ensure that they are properly diversified, warns the senior analyst at deVere Group.
The warning from Tom Elliott, International Investment Strategist at deVere Group, comes as US President Donald Trump announced Tuesday that the United States will exit the Iran nuclear deal and impose “powerful” sanctions.
Mr Elliott comments: “Investors should expect an increase in market volatility following Trump’s announcement that he is quitting the Iran nuclear deal.
“There will be global stock market sell-offs as the world adjusts to the news.”
He continues: “Due to the severity of the US President’s approach, in the shorter term at least it is likely gold and the US dollar may rally on growing fears of further conflicts in the Middle East breaking out; and risk assets, namely stocks and credit markets, may weaken. Oil may rally strongly.
“We will need to wait for the full Iranian response. However, I expect that they will try to continue to appear the reasonable partner and work with Russia and the Europeans, playing them off against the US If they take a more aggressive stance, oil, gold and the dollar will go considerably higher.”
Mr Elliott concludes: “Geopolitical events such as these underscore how essential it is for investors to always ensure that they are properly diversified - this includes across asset classes, sectors and geographical regions – to mitigate potential risks to their investment returns.”
Ripple can be expected to “convert the remaining crypto-cynics,” affirms the boss of one of the world’s largest independent financial services organisations.
The prediction from Nigel Green, the founder and CEO of deVere Group, comes as Ripple (XRP) experienced a spike last week, adding another $62bn to its market value. The cryptocurrency also broke some key resistance, such as $0.6500 and $0.6600, nudging it towards the important $0.7000 level against the US dollar.
Mr Green, whose firm launched the pioneering crypto exchange app, deVere Crypto, says: “After the cryptocurrency market somewhat overheated at the end of 2017 – thanks largely to investors piling in, pushing Bitcoin to an all-time high of more than $19,000 – there was a major, natural price correction in the first quarter of this year of most of the major cryptocurrencies.
“But the cryptocurrency market is, once again, now looking already significantly more bullish than it did in Quarter 1.”
He continues: “This latest upward crypto market trajectory can be attributed to the fact that institutional and retail investors are increasingly appreciating the fundamentals, such as the need and demand for digital currencies in a digitalised, tech-driven age.
“Also there is now huge awareness that blockchain, the technology that underpins the likes of Bitcoin and Ripple, is likely to be the world’s next major disruptive technology.”
Mr Green goes on to assert: “Cryptocurrencies are now really coming into the mainstream. But there are still some critics of the crypto revolution. However, I believe that Ripple (XRP) can be expected to convert the remaining crypto cynics.
“This is primarily due to Ripple’s apparent emphasis on integrating with banks and other financial institutions.
“For instance, banking giant Santander has recently launched a foreign exchange service that uses blockchain technology developed by Ripple to make same-day international money transfers. It is also reported to be in talks with other major global banks and money transfer groups to develop similar products.”
He adds: “However, cryptocurrencies remain highly determined by market sentiment, and caution must be exercised, and professional advice should be sought.”
The deVere CEO concludes: “By focusing its development strategy in this way, Ripple is likely to help change the perception of crypto, expand its own value, and co-lead the ongoing shift in the way the world uses, manages, accesses, stores and exchanges money.”
(Source: Prior Consultancy)
Stock market investors should not be spooked by the return of volatility on US and global stock markets, they should instead use it to their advantage.
This is the message from deVere Group as US stocks fell into correction territory on the first day of the new quarter, triggering a ripple effect to other financial markets around the world.
The turbulence is largely due to investors becoming rattled over rising trade tensions between the US and China – the world’s first and second largest economies – and major tech firms’ recent declines.
Tom Elliott, deVere Group’s International Investment Strategist, comments: “Stock market investors should not be spooked by the return of volatility on US and global stock markets.
“We are emerging from an unusually long period of low volatility, and this makes recent sharp moves in stock prices feel like an important signal when, in all likelihood, it will prove largely irrelevant for long term investors.
“Several themes are being used to describe Monday’s fall on Wall Street: fear that Trump will announce another set of tariffs on Chinese imports, Trump’s attack on Amazon’s low - but legal - corporate tax bill, and consumer and regulatory backlash against those tech companies who harvest and re-sell personal data to advertisers. None of these are sufficient triggers for a major correction outside of certain sectors, with tech looking the most vulnerable.”
He continues: “Indeed, the current correction feels like a continuation of March’s de-rating of tech stocks, as investors revaluate future earnings potential in the sector. Tech makes up about a quarter of the market cap of the S&P500, so it is important. But its problems shouldn’t be bringing down other sectors. Therefore stock price falls elsewhere on Monday – for example discretionary goods and energy - are perhaps best described as ‘collateral damage’.”
Mr Elliott goes on to add: “The sell-off in late January and early February felt more convincing, as a sharp rise in Treasury yields amid some buoyant wage and inflation data combined to convince investors that the days of cheap money are coming to an end. Risk assets, such as stocks, fell in response.
“A trade war with China certainly has the potential to be a trigger for a major sell-off, but we are not there yet. Otherwise Treasury yields would have risen in recent weeks, in response to a likely rise in inflation coming from tariffs and import quotas. Instead, 10-year Treasury yields have remained in the 2.7% to 2.8% range.”
Nigel Green, the founder and CEO of deVere Group, says many investors will welcome this bout of volatility: “Some of the most successful investors embrace some volatility as major buying opportunities are always found where there are fluctuations.
“Fluctuations can cause panic-selling and mis-pricing. High quality equities can then, for example, become cheaper, meaning investors can top up their portfolios and/or take advantage of lower entry points. This all, in turn, means greater potential returns.”
He concludes: “A professional fund manager will help investors take advantage of the opportunities that volatility presents and mitigate potential risks as and when they are presented.
“Many serious investors will be using this turbulence to create, maximise and protect their wealth.”
(Source: deVere Group)
Bitcoin will see-saw in coming weeks but the cryptocurrency mania is set to grow, affirms the CEO of one of the world’s largest independent financial services organisations.
The observations by Nigel Green, founder and chief executive of deVere Group, come after Bitcoin fell by $2,500 last weekend after hitting record highs.
Mr Green comments: “Bitcoin investors have been on a rollercoaster this year. The world’s biggest cryptocurrency soared to a new record of $17,000 on Thursday before nosediving by $2,500 hours later.” Bitcoin has since seen a rise to $18,000 and then $19,000 in the past week, with some dips here and there.
“This correction is an appropriate one after such frenzied trading. We should expect to see Bitcoin see-sawing in coming weeks. Sharp moves are likely, followed by subsequent corrections.
“This is due to the increased interest in this exciting new alternative currency, and especially with the Chicago Board Options Exchange allowing investors to trade Bitcoin futures in the next few days, driving hikes.”
He continues: “Bitcoin’s impressive rally has piqued interest in the phenomenon of cryptocurrencies in recent days and pushed demand further skywards. I believe we will look back on this point as the start of digital currencies becoming mainstream. They can no longer be dismissed as a fad or fraud. Of course, Bitcoin and other cryptocurrencies will rise and fall – but all traditional currencies do the same.
“As they become ever-more established, cryptocurrencies will gain in popularity and the growing cryptocurrency mania will likely result in the launch of more and more digital currencies to meet demand.”
In a statement on a few weeks back, Mr Green also urged caution. He said: “Bitcoin remains a major gamble as it is very much an ‘unchartered waters’ asset – we’ve simply not experienced this before. Also, an asset that goes almost vertically up should typically raise alarm bells for investors. In addition, many would argue that there’s limited underlying economic value.”
The deVere CEO concluded: “Today’s digital world needs cryptocurrencies. One or two of the existing ones will succeed, whether it’s Bitcoin or not remains to be seen. But the dawn of the financial technology era has arrived.”
(Source: deVere Group)
Failure to start Brexit trade talks at the EU summit in December could lead to “a difficult choice between two opposite policy stances from the Bank of England”, warns the senior investment analyst at one of the world’s leading independent financial services organisations.
deVere Group’s International Investment Strategist, Tom Elliott, is speaking out after the Bank of England (BoE) raised interest rates last week for the first time since 2007, and as senior officials in Brussels say the EU is unlikely to agree to trade talks in December unless the UK offers more concessions.
Mr Elliott comments: “The uncertainty over the UK’s eventual trading relationship with the EU is blamed by some for the weaker economic growth seen since the spring. Investment spending is being deferred or abandoned, with the long term impact being weaker productivity gains and wage growth than would otherwise occur. Sterling may fall victim to this uncertainty, and become a ‘big short’ on foreign exchange markets in December if an EU heads of government summit decides that no progress has been made on the divorce bill.
“They can then refuse permission for the EU negotiators to move on to discuss the post-Brexit trading arrangements, and a possible transition agreement. The UK government needs to show progress on this area, soon, in order to assure British business that an eventual deal will be had.. The longer talks on the future trading relationship are postponed, the greater the risk of no deal being in place by March 2019 when the UK leaves the EU, and the greater the disruption to the U.K economy.”
He continues: “This will put the Bank of England in a difficult spot - should it cut the bank rate to support the economy but risk a further fall in sterling, or raise interest rates further to support the pound? Keeping the currency attractive is important when the UK Treasury has to sell billions of pounds worth of gilts each year in order to support a 3.6 per cent annual budget deficit.
“The BoE will be under intense pressure to ‘support Brexit’ from influential Eurosceptic politicians, who have openly called for the Governor, Mark Carney to be sacked on grounds of his warnings over Brexit, both before and since the referendum.
“This means keeping rates low to help support the economy through the Brexit shock. Politics therefore favours letting the pound take the strain, even though gilt yields may have to rise to attract foreign buyers, increasing the funding costs of the government deficit.
“The Treasury is increasingly seeing Brexit as an exercise in damage control, but has limited fiscal tools at its disposal to support demand should Brexit go badly. There is no money for tax cuts or spending increases. This adds pressure onto the Bank of England to go easy on interest rate hikes.”
Mr Elliott concludes: “The Bank of England has presumably balanced the risks of a rate hike with the overall aim of normalising monetary policy and curbing credit growth, and has concluded that a slight dampening of demand now -while the economy is at least still growing- is better than leaving rates at record low levels that encourage over-borrowing by consumers.
“Brexit complicates setting monetary policy. And the BoE will be pulled in two different directions should the EU summit in December fail to make progress on the Brexit divorce settlement.”
(Source: deVere group)
Brexit, Trump and the chaos in Catalonia are driving demand for multi-currency accounts – and within 10 years they will be the norm, affirms the boss of one of the world’s largest independent financial advisory organisations.
The comments from Nigel Green, founder and CEO of deVere Group, come as deVere E-Money’s global money app, deVere Vault, which has 27 different currency wallets, reveals that it expects to surpass 40,000 downloads and users by the end of the year.
Mr Green asserts: “We’re living in an increasingly uncertain world. Serious, far-reaching and ongoing geopolitical developments are driving internationally-minded people to concentrate on political risk and currency risk.
“Issues such as the deadlocked Brexit talks and what the post-Brexit era will look like, the unpredictability of the Trump presidency, and the chaos in Catalonia as it potentially moves towards independence from Spain, amongst many other geopolitical factors, present huge and sobering questions marks.
“This uncertainty is resulting in more and more people beginning to look at the possible impact such issues have on their wealth and how they can mitigate this risk. Understandably, this is spiking huge interest in and demand for accounts in which you can hold money in different currencies.”
He continues: “Ever since the major and sustained drop in the pound immediately after the Brexit referendum, people have become more focused that they could have currency risk.
“It was a wake-up call to many across the world; it was a watershed moment.”
The deVere CEO concludes: “Multi-currency accounts will be the norm within 10 years – most people within a decade will have the ability to access, use and manage their money in different currencies - for three main reasons.
“First, people have woken up to the fact that even ‘remote’ political risks can be linked to currency risk.
“Second, each year there are more and more expatriates and internationally-mobile people and businesses.
“Third, holidaymakers are increasingly aware of and unwilling to accept the rip-off charges their traditional banks impose on them for using their own money overseas.”
(Source: deVere group)
