Markets Offer a 'Sweet Shop' of Opportunities: Strategist
The slump in stock markets this week offers investors an opportunity to make money on good companies dragged down by negative sentiment, an analyst told CNBC on Wednesday.
"If you get a 500-point swing in a day there is plenty of opportunity to invest and what we've seen is that every company has been dragged down with a lot of malaise over the last few days, the opportunity is there to buy exceptionally good companies at cheap prices. It's like a sweet shop. There's a lot of choice but you have to select them on a stock by stock basis," said David Miller, head of alternative at Cheviot Asset Management.
He also blamed the unrealistic approach of central banks and governments to the slowing economy for causing the latest market volatility,
"What's interesting over the last week is that companies have been saying for some time now that conditions are tough and last week we saw a recalibration of that and we have now got back into realistic territory," he added.
As markets tanked this week, investors have sought out safe havens with US Treasurys and gold winners.
Many experts now see $2000 an ounce a realistic possibility for gold over the medium term.
He added that the 'soft patch' talked about over the last few months in response to sluggish economic growth had turned out to be a falsehood.
"The Fed was pretty clear about how tough the conditions are so anyone who thought there was going to be a soft patch in the middle of the year and then it was all going to be fine, that's out of the window we have now got more realism," he said.