Veteran fund manager Geoff Wilson has seen it all in his 40-year investment career. But the incredible surge underway in the markets during the coronavirus pandemic even took him by surprise.
“The excess right now hides the fact that trading is not that easy,” he says The Sydney Morning Herald and Age in an interview. “A lot of people who have invested in this market haven’t seen a major correction and aren’t used to losing money and that makes me nervous.”
In many ways, now is a great time to be a fund manager. Stock markets in Australia and around the world are reaching or approaching record highs, while new asset classes like cryptocurrencies are reaching stratospheric valuations. But while Wilson acknowledges the rally may still have a way to go, he is still warning retail investors to be cautious and not to expand too much. Because the more the markets run, the more they end up falling.
“The market has had a good run, and while there are signs of excess it could go significantly higher and that should be concerning,” Wilson said.
But in this market “you have to be comfortable with the possibility of waking up tomorrow to find your shares down by 20 to 30%,” he said.
A self-proclaimed “traditionalist,” Wilson’s fund managers treat the current bull market with caution. Because the boom was driven by record interest rates, Wilson says the multi-million dollar question is when these interest rates will rise. For this reason, he says it is more important than ever to have a medium to long term view of the market.
Wilson, who heads Wilson Asset Management, spoke to this header about the success of Future Generation, a philanthropic investment model he founded in 2014 that has so far paid more than $ 40 million to organizations. charities focused on children and youth at risk by investing 1% of net tangible capital funds annually.
The leading fund manager, who led a major campaign against the Federal Labor Party’s plan to abolish postage credits in the last election, established Future Generation as a vehicle for the fund management industry and finance to make a positive contribution.