DeVere Group chief executive Nigel Green is urging investors to act now to protect their portfolios against currency wars brewing between the great financial powers.
Green’s comment comes after the pound hit a 13-month low against the euro and a six-month low against the dollar this week, while Japan makes clear its intention to devalue the yen.
The currency volatility witnessed in the first month of 2013 is likely to continue, argues Green, with more countries adopting a “beggar thy neighbour policy” to devalue their currencies in a bid to strengthen their own exports.
Green sees Japanese policy to weaken the yen as a concern for the likes of the US, China and India, as it will give Japanese exporters an “enormous trade advantage” and may prompt other countries to seek their own devaluations.
Elsewhere, in Europe, Green says Britain’s “dismal growth figures” have damaged the pound’s “safe haven status”, resulting in investors buying euros and slashing the value of sterling.
Green encourages investors to evaluate their portfolios as a matter of “paramount importance”, to ensure that they will be positively rather than negatively, impacted by events.
He says: “With volatility set to dominate the non-stop foreign exchange market, now is the time to review investments.
“Now more than ever, you must ensure your portfolio is a balanced one – now is not the time to put all your investment eggs in the basket of one country or asset.”