Nigel Green, CEO of independent financial advisory, asset management and fintech group deVere, has warned investors should heed the risk to their investments from social unrest, which is on the rise globally.
The warning comes as investors begin to review and adjust their portfolios for the rest of 2022, with deVere pointing to research suggesting social unrest is growing.
Green said: "There are many headwinds ahead for the rest of this year that could impact investor returns."
"One of the biggest - and most overlooked - is the rising risk of large-scale social unrest."
"The global cost of living crisis is the major contributing factor."
Green noted the "Soaring food and energy prices triggered by unprecedented shipping backlogs or shortages of materials and labour, Covid lockdowns in China, and the war in Ukraine, known as ‘the world's breadbasket' as it's one of the world's leading exporters of corn, wheat, barley and sunflower oil, amongst other staples."
"Red-hot food and fuel prices are the most painful type of inflation. Should the prices of smart TVs jump, people can delay buying one. But they cannot stop feeding themselves or their families. Similarly, the costs of transportation make up the price of almost everything we buy."
"When people can't feed their families, get to work or take their kids to school due to high fuel prices, or heat their homes, it's an almost inevitable recipe for large-scale civil unrest."
deVere Group sees signs of the impact: the UN has already been forced to ration food supplies to millions of people around the world due to high prices and supply disruptions, and warns that in 2023 there will be a food availability crisis.
Green added: "The downturn in the property market, slower economic growth, which leads to more uncertainty, less business investment, more redundancies and less cash available for governments, all adds to a perfect storm scenario."
It is in this context that Green says that investors need to review and where necessary adjust their portfolios. This is to ensure that they are best positioned to mitigate risks, and to seize on long-term opportunities to grow wealth.
"Whenever there is high uncertainty, there is opportunity - all the world's most successful investors know this. And history teaches us that downturns are the best time to invest."
"Stepping off the sidelines to enhance your investment portfolios in these times is to be championed, but you must also ensure that those bolsters to your investment help to create resilience and dynamism."
"In short, you must top-up your portfolios wisely in this currently volatile environment to side-step risks and capitalise on the upsides."
"A balanced investment approach is always sensible - and do not forget to hold some cash (or liquidity funds) for emergency uses, or for opportunistic investing."
"But this is more challenging when volatility is high. Nonetheless, diversification remains essential."
"Investment headwinds are many in the coming months. But mass social unrest is not talked about enough, likely due to high-level political and commercial interests."
"However, if you're serious about protecting and growing your money over the next six months it should be a major concern."
"Not paying attention could be a costly mistake."