Investors can use eurozone volatility to their advantage

June promises to be a decisive month for Europe and the decisions taken this month by EU leaders should guide investors, to some extent, on how to move forward, says the chief executive of the world’s largest independent financial advisory firm.

Nigel Green of the deVere Group says: “We’re at a pivotal point of the eurozone crisis. If the authorities ‘drop the ball’ then we could see a repeat of the 2008/2009 banking crisis.

“However, it appears that the authorities are finally seeing the seriousness of the situation and will act. If they act aggressively we will see a decent rally; although I believe that this stress intervention period will continue over the next few years.

“Therefore, we will see, essentially, a slide ways market with interests staying low. I think we will eventually see a two-tier euro with a smaller core of countries working closely together.”

So what does this mean for investors?

“History proves that in times of turmoil there are significant opportunities. Investors should be working closely with an expert IFA as there are many ways that they can take advantage of the market conditions.

“In general terms, we believe that diversification is key in the current environment as it will reduce risk and boost returns.

“In addition, those who are keen to take a long-term stance on their investments can use the uncertainty to their advantage as the volatility tends to shorten many investors’ horizons. For instance, as most rush to buy assets such as government bonds, equities become cheaper, meaning that those who take a long-term view can benefit enormously at this time.

“The goings-on in Europe are fast-moving and, as a result, it has never been more important to seek expert financial advice if you are to fully benefit from the eurozone situation. Whatever the outcome of this month’s summits there are opportunities to be had.”