By Amelia McGuire
Veteran fund manager Geoff Wilson has seen it all during his 40-year investment career. But the incredible surge underway in the markets during the coronavirus pandemic has even taken him by surprise.
“The excess at the moment hides the fact that trading is not that easy,” he tells The Sydney Morning Herald and The Age in an interview. “Many people who invested in this market have not experienced a major correction and are not used to losing money and that makes me nervous.”
In many ways, it is a great time to be a money manager. Sharemarkets in Australia and around the world are at or near record highs, while new asset classes like cryptocurrencies are achieving stratospheric valuations. But while Wilson acknowledges the rally could have further to run, he still warns retail investors to be cautious and not over-extend themselves. Because the further markets run, the harder they eventually fall.
“The market has had a good run, and even though there are signs of excess, it could go significantly higher and that should be worrying,” Wilson says.
But in this market “you have to be comfortable with the possibility of waking up tomorrow to find your shares down 20 to 30 per cent”, he says.
Read more in The Sydney Morning Herald