High net wealth investors should be looking to again
increase the risk of their portfolios, satisfied the worst of the global
financial crisis is over, JP Morgan private banking EMEA CEO Pablo Garnica told
Speaking during a visit to Dubai,
Garnica said the appetite for higher risk investments had returned, including
in regions still considered in financial difficulty.
“I think we’re back in a world where it’s important to be
invested,” he said.
“In the past year people were very conservative when they
were talking about investment... and that made some people sit on the
sidelines. [But now] it’s very important to be invested – obviously the right
way, it doesn’t mean that you need to be ultra aggressive, you need to have the
right profile of risk but it’s important to be invested.
“I think the results of last year have proven [that]
fact. Last year the financial markets have been pretty good and the people who
were invested benefited from that.”
Garnica said JP Morgan was advising high net wealth
investors to re-examine Europe.
“Today we are adding risk to the portfolios, we’ve been
under weight risk,” he said.
“We were in a conservative position given events in
certain markets and we were under weight in European equities last year. This
year we are adding a little bit of that [back].”
Garnica said while economic woes continued in Europe as a
whole, the future was becoming clearer.
“At least the agenda is clearer today, there’s less
uncertainty,” he said. “If you think about last year there was a lot of
uncertainty and now I think some of the very fragile countries have a more
clear agenda on how to solve their problems – it will not happen overnight but
at least I think the uncertainty is lower in the market than last year.
“But that doesn’t mean we will go into the market and
invest in anything.”
European-based companies with businesses outside the
continent and companies with high yields that paid dividends were recommended.
Garnica said the Middle East had continued to grow in the
private banking space and was a priority region for JP Morgan.
“We’re very opportunistic about the growth of the
business in the region,” he said. “The Middle East is an important place for JP
Morgan, not only for private banking [but also] for all lines of the business.”