In the wake of the Covid-19 outbreak, the comparative weight of financial asset classes will be radically altered, as investors already actively seek ‘new world’ sectors and this may lay the groundwork for new financial frameworks across the world.

Changes wrought by the current slowdown are increasingly forecast to shape a new era of financial operation but one that presents as many challenges as opportunities as the threat of semi-permanents lockdown increases friction.

“Every economic downturn creates a new normal. The one being triggered by the coronavirus pandemic will be the same.  The Covid-19 impact has hit firms across the world – there’s been immense international disruption – with many sectors experiencing major issues of supply, demand, or both. However there remain some sections of the economy which are benefitting from the coronavirus fallout,” Nigel Green, CEO of analyst firm deVere Group, said.

This is evidenced by the tech-heavy Nasdaq Composite index which has done well, where other global indices have faltered. New industries will come into their own and, as ever, there will be winners and losers.  This will mean job losses in some sectors and huge – possibly unprecedented – job and investment opportunities in others.”

Last week, in a media release, Nigel Green noted that a Covid-19 recession is likely “to fundamentally shift how we live, do business and invest.”  He added that it could also be expected to “speed up the Fourth Revolution, which is fuelled by new technologies, such as Artificial Intelligence and mobile supercomputing.”
 
Mr Green goes on to say: “Big tech is just one likely winner.  The likes of Apple, Facebook, Amazon, and Google’s parent company Alphabet have immense cash reserves to continue, maybe even bolster, research and development and to sustain their business operations.

“This sector is also likely to face higher demand as social distancing, isolation and quarantine affect much of its existing and potential consumer base.

“Plus, recently heightened regulatory restrictions and political opposition to their expansion and growth of influence is likely to be scaled back considerably.”

He adds: “For similar and other reasons, other sectors besides the Silicon Valley giants, are likely to continue to offer positives for investors. 

“These include pharmaceutical and healthcare firms, delivery brands, supermarkets and manufacturers of electronic goods, such as fridges and freezers.”

Nigel Green concludes: “Of course, there will be a recovery from the global economic impact of coronavirus. 

“But the world has already changed as a result of it – and will do so more – and savvy investors are aware of this new normal and are already readjusting their portfolios accordingly.

“Times of immense tumult can be times of great ingenuity, promise and opportunity.”

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.