Tags: DeVere | Nigel Green | Trump | Threat | Investors | Portfolios

DeVere CEO Nigel Green: Trump Biggest Threat to Investor Portfolios

DeVere CEO Nigel Green: Trump Biggest Threat to Investor Portfolios
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By    |   Monday, 22 May 2017 02:14 PM EDT

President Donald Trump poses the greatest risk for regular investors in the world — even ahead of a possible recession in China — but there are also important opportunities, affirms the CEO of one of the world’s largest financial services organizations.

deVere Group founder and CEO, Nigel Green, is speaking out after significant Trump-triggered global market sell-offs last week ahead of his maiden foreign trip as president.

“The fact that Mr Trump has struck a $110 billion arms deal with Saudi Arabia on Saturday is being hailed as a boost for American jobs, his more conciliatory and statesmanlike tone towards Muslim leaders is being applauded, as is his closer working relationship with China’s President, Xi Jinping," said Green, also a Newsmax Finance Insider.

"It perhaps shows that Trump is — finally — appreciating the value and importance of good foreign relations," Green said.

Trump visited Saudi Arabia over the weekend and sealed $110 billion in deals through which Riyadh will buy U.S. arms to help it counter Iran, with options running as high as $350 billion over 10 years, Reuters reported.

“However, at home Trump remains under siege following a series of scandals, including that he may have attempted to get the recently fired FBI director, James Comey, to end an investigation into the former national security adviser, Michael Flynn, and possible Russian interference in the U.S. election,” Green said.

“Against this backdrop of recent events, President Trump and his administration is the single biggest threat to investors’ portfolios in the near term," Green explained.

“Being the CEO of the world’s largest economy, a U.S. president’s actions and policies will always have an effect on markets and, therefore investors’ returns. But Trump’s unpredictability, the scandals that swirl around him, and the media’s obsession and magnification, make this a unique set of circumstances," he explained.

“Trump is creating volatility and is likely to continue to do so. But while this can pose a real threat to those who are unprepared, complacent, or who overreact, volatility is good for markets and savvy investors alike, because it generates important investment opportunities,” he said.

Green detailed four reasons as to why Trump remains the gravest threat to investors:

“First, the ongoing scandals could quite feasibly distract the Trump administration from its agenda of tax cuts, deregulation, infrastructure spending and other pro-business legislative measures, which are hoped would have beneficial effects for investors," Green said.

“Second, Trump appears to be less of a geopolitical risk now that he was at the beginning of his tenure, whichever way you look at it, his administration is chaotic and unpredictable – and history shows that financial markets loathe uncertainty. This was demonstrated by last week’s panicked sell-offs," he said.

“Calls growing for Trump to be impeached are growing and the risk of this happening has substantially increased since the announcement last week of a special counsel being appointed to look into his alleged Russian links. Clearly this is creating uncertainty," Green explained.

“These waves of turbulence might be brushed off as a ‘bump in the road,’ all too often investors are tempted to overreact and this can have disastrous consequences for their portfolios. Investors should have longer-term horizons for the optimum results, as stock markets generally go up over time, but acknowledge that there will be ups and downs along the way," he said.

“The unprecedented media circus around Trump magnifies the situation and this could lead to investors reacting in a knee-jerk manner that could be detrimental," he said.

“Third, with such media scrutiny, investors could miss other important geopolitical and economic risks that could affect markets and, therefore, returns. These include the downturn in China’s credit impulse that could create an important drag on Chinese growth in the near future. Of course, this could have serious and far-reaching consequences – yet few people are as interested in this, or other key risks, as they are in Trump," he said.

“And fourth, it could be reasonably argued that a market correction is needed and that Trump and the scandals following him could be the catalyst for this,” he said.

However, investors and markets discarded any such concerns about Trump being a threat.

Wall Street extended gains in early Monday afternoon trading, boosted by technology shares and as defense companies rose after the United States and Saudi Arabia signed the multi-billion dollar arms deal.

"The bar for success has been set extremely low for President Trump and it seems that he's been able to meet that over the weekend," Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh, explained to Reuters.

Trump's visit is his first foreign trip since taking office and one the White House hopes will shift the focus away from domestic controversies such as his firing of a former FBI head last week and reports of his administration's links to Russia.

"Because we were down last week because of political news, the inverse is true too: that nothing bad happened over the weekend in political news," Forrest said.

Nigel Green is founder and CEO of deVere Group. One of the world’s largest independent financial advisory organizations, de Vere does business in 100 countries and has more than $12 billion under advisement.

(Newsmax wire services contributed to this report).

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InvestingAnalysis
President Donald Trump poses the greatest risk for regular investors in the world - even ahead of a possible recession in China - but there are also important opportunities, affirms the CEO of one of the world's largest financial services organizations.
DeVere, Nigel Green, Trump, Threat, Investors, Portfolios
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2017-14-22
Monday, 22 May 2017 02:14 PM
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