Despite the sharp correction seen in recent weeks, European equities – especially small caps – still provide value-minded long-term investors with opportunities, according to NN Investment Partners (NN IP).
NN IP sees value in good quality companies that have sold off aggressively with markets but are well prepared to weather the storm due to strong balance sheets and good business moats.
Maarten Geerdink, Head of European Equities at NN Investment Partners, says: “The current market volatility offers great opportunities for investors who dare to take a longer-term view. Although we shy away from predicting the short-term movements of the stock market, based on what history has taught us, we do expect equity markets to move higher well before the crisis is behind us and the economy turns up again.
“Furthermore, the measures that governments and Central Banks have taken in their efforts to fight the current situation will most likely prove inflationary in the long term. In such a scenario, it is much better to own stocks than to hold cash equivalents that depreciate in real value. Taking a longer-term view, equities will likely outperform cash over the next ten years and most probably by a substantial degree.”
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European small caps hold opportunities for long-term investors, says NN IP
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Despite the sharp correction seen in recent weeks, European equities – especially small caps – still provide value-minded long-term investors with opportunities, according to NN Investment Partners (NN IP).
NN IP sees value in good quality companies that have sold off aggressively with markets but are well prepared to weather the storm due to strong balance sheets and good business moats.
Maarten Geerdink, Head of European Equities at NN Investment Partners, says: “The current market volatility offers great opportunities for investors who dare to take a longer-term view. Although we shy away from predicting the short-term movements of the stock market, based on what history has taught us, we do expect equity markets to move higher well before the crisis is behind us and the economy turns up again.
“Furthermore, the measures that governments and Central Banks have taken in their efforts to fight the current situation will most likely prove inflationary in the long term. In such a scenario, it is much better to own stocks than to hold cash equivalents that depreciate in real value. Taking a longer-term view, equities will likely outperform cash over the next ten years and most probably by a substantial degree.”
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