Investors must think long term to beat inflation effects, says stocks guru
Investing in high-credibility companies that pay regular dividends is the key way for investors to beat the economic crisis, a stocks guru said on Monday.
Josh Duitz, deputy head of Global Equities at UK-based investment company Abrdn, said there was a 50-50 chance of a worldwide recession this year. All would depend on the effectiveness of the US Federal Reserve’s measures to tackle inflation.
"If the Fed can tackle inflation effectively and people can get back to work, the situation may improve," Duitz said.
He added that global stocks usually bounced back eventually from unprecedented shocks like the Covid-19 crisis, which has triggered supply disruption and inflation.
He noted that many companies are still able to pay dividends despite the pandemic and rising prices. He also expects dividends to grow by an average of 7 per cent this year and 5 per cent next year.
He advised investing equal sums of money at regular intervals regardless of market fluctuations to generate returns in the long term amid inflation.
"We think investing in companies with high credibility who pay dividends regularly is the best way to go forward," he added.