Zimpapers Logo

Mr Chinamo

Business Editor
Investors are being urged to prepare a “defensive portfolio” and to be ready to take advantage of the imminent “significant opportunities” that will likely present themselves.

Mr Tom Elliott, deVere Group’s International Investment Strategist, said there were opportunities from the International Monetary Fund report which predicted a 3,5 percent global economic growth rate.

“The IMF’s Economic Outlook predicts 3,5 percent global GDP growth this year. Many economists believe 3 percent is on the cold side, while 4 percent is a little hot, so the IMF’s forecast at half way between the two is at first glance reassuring.

“But there is a sting in the tail, which is when they discuss risks to this scenario.

“The report warns of a key risk being a ‘cascade of disruptive adjustments’ once the US Federal Reserve finally begins raising interest rates, and it becomes harder and more expensive to take out new debt and to roll over existing loans.

“A wave of defaults, bankruptcies and, at worst, another round of bank insolvencies may follow.”

He said as such, investors should ensure they have a diversified portfolio, preferably holding some cash and avoiding long duration bonds and — if possible — exposure to banks.

“Having prepared a defensive portfolio, investors should, typically, sit tight if there is a market sell-off. Invariably markets recover, while there is a significant risk of missing this if a portfolio has been liquidated.

“Indeed, it is likely that there will be significant opportunities ahead. Investors should be able to benefit from any sell-off through buying bonds and equities at cheaper prices, thanks to the effect of ‘pound cost averaging’.

“The shifting dynamics must be monitored carefully to be able to benefit from the opportunities that will present themselves and to mitigate the avoidable risks.”

The deVere Group is the world’s leading independent offshore financial consultancy group, with more than $10 billion of funds under advice and administration, and over 80 000 clients around the world.

The group helps clients, who range from international investors to expatriates who have moved their families overseas to live and work, to find financial strategies and investment vehicles that are best suited to help them create wealth.

deVere Zimbabwe is a Securities and Exchange Commission-recognised company that is locally indigenised and fully compliant with the company establishment laws and regulations in Zimbabwe. Shane Helberg, deVere area manager for Zimbabwe said: “SECZim are aware of our operations and should there be any questions on our legality in Zimbabwe the public may contact the SECZ directly.”

SECZim said the commission is still in the process of licencing offshore financial advisory firms.

Chief executive Mr Tafadzwa Chinamo said the commission realised the need to licence firms last year.

“All companies in the offshore financial advisory industry are currently operating in the window period as SECZim is still processing their licences.

“We only recognised the need to licence them last year and therefore since its new terrain, the process is taking slightly longer. We however, recognise the players who advise Zimbabweans on where to invest their money overseas.”

The comments come in the wake of news reports which accused the advisory firm of externalisation.

“There is strong reason to believe that some recently published newspaper reports have been based upon unreliable sources who deliberately provided misinformation for their own professional and personal development.

“There is a difference between externalisation and moving money legally for offshore investments. We have helped a lot of clients to break into international financial markets.”