Deflationary pressures will persist across the global economy, with impulsive investors looking to act on short-term moves the most likely to miss out, he said.
“The case of Japan shows us how it takes years to recover from a severe economic downturn – there will be enduring deflationary pressures and investors must not get carried away by any pick up,” explained the member of Carmignac Gestion’s investment committee.
“The key point is don’t panic when you see market movement because its froth”.
Saint-Georges recommends equity investors own stocks that will do well in this deflationary environment, especially those boasting strong brands and pricing power.
“Yield remains a rare and the chase is lasting,” he added.
“With the Japanese crisis, which started in the early 1990s, markets did nothing, but there were still winners, especially those that benefited from currency movements.
“It is quality stocks that will do well today, because they will end up getting re-rated. It is a ‘nifty-fifty’ kind of environment again.”
