Markets are presenting potential buying opportunities following a recent two-week downturn, according to Sean Teo, a global sales trader at Saxo Singapore. The assessment comes as geopolitical tensions and economic uncertainties continue to weigh on investor sentiment.
Teo advises investors looking to expand their portfolios to focus on established companies and those that have experienced price corrections during the current market volatility. He suggests that further discounts may emerge if the current period of instability persists, driven by “emotional selling.” “Staying invested and sticking to your long-term plan matters more than trying to time every swing,” Teo said.
The advice aligns with broader analysis suggesting that prolonged military conflicts typically have a limited, short-term impact on equity markets. Ritesh Ganeriwal, head of investment advisory at Syfe, a digital investment platform, noted that the S&P 500 has historically bottomed out within approximately two weeks of such events and recovered within a month. Bank of Singapore’s investment strategy team echoed this sentiment, stating that geopolitical events do not usually cause lasting negative effects on equity prices.
Teo further indicated that stocks directly linked to oil prices could become more attractive once the current tensions subside, as reduced input costs would likely boost profitability. He also cautioned against exiting the market entirely, warning that doing so could be detrimental if inflation were to increase, diminishing purchasing power.
Alongside a focus on equities, Ganeriwal recommends diversification and a disciplined investment approach. He highlighted gold as a potential hedge against uncertainty and bonds as a source of stability. He also warned that the US dollar could weaken as the situation de-escalates, suggesting investors balance their exposure to the US currency with the relatively stable Singapore dollar, particularly for those residing in Singapore.
Recent market movements have followed a pattern of shifting investor behavior, moving away from the broad rally experienced in recent years, according to Ganeriwal. This shift necessitates a more selective approach to investment, rather than automatic purchases during market dips.
Sean Teo of Saxo Singapore also discussed market reactions to recent developments, including a shift in the US presidential race and a global IT outage, in a previous appearance on MoneyFM 893. He has nearly a decade of experience in financial markets, focusing on macroeconomic trends and identifying related investment opportunities.
