Volatility Does Not Prevent Opportunities From Emerging for Investors

The volatility seen in markets in a context marked by Greenland, tariffs, the possible shutdown of the United States government starting this Saturday and the controversy surrounding the appointment of the new Chair of the Federal Reserve does not prevent investment opportunities from emerging, according to Ismael García Puente, Deputy Director of Investment Strategy at Mapfre AM.

“The dollar may remain under downward pressure in the short term, but we believe that the euro and the pound have structural problems that lead us to think that this weakness of the U.S. currency against them does not have much further to run. In the long term, we see some recovery in the dollar,” he explains.

The luxury sector has been affected by China’s economic situation, but as the country emerges from its slump “we should see a recovery in the sector,” García Puente notes. He also anticipates stronger future demand for purchases in Europe, given the growing levels of accumulated savings.

Despite the volatility, the macroeconomic backdrop is positive and is supported by accommodative monetary policy. “This leads us to hold an overweight position in equities compared with fixed income,” García Puente explains. He also recommends diversification, as there will be different types of corporate portfolios that may perform well over the course of this year.