It’s too early for optimism when it comes to the economy, according to the U.K. head of JPMorgan’s Chase bank.
Amid persistently high inflation and signs of a slowing global economy over the past year, many market watchers have speculated that a recession in the U.S. and beyond is on its way in 2023.
However, with the labor market and other economic indicators remaining robust amid the uncertainty, some economists have predicted in recent months that a recession could be avoided altogether.
Others have revised their forecasts, arguing that a downturn is likely to unfold much later in the year than initially expected.
Speaking to Fortune on the sidelines of the MoneyLive Summit in London on Wednesday, Sanjiv Somani, U.K. CEO of Chase, said the economy remains on shaky ground, despite some early signs of resilience.
“I would still characterize it as uncertain,” he said. “It’s too early to call that we are out [of the worst] or that the green shoots are already coming through.”
He added that while there had been some “good news” in the form of robust macroeconomic data in recent months, a lot of uncertainty was still lingering.
“I would be wary of reacting one way or the other at this point,” Somani told Fortune. “I think the best outlook is it’s uncertain—let’s brace ourselves for what might come.”
Investment strategy
Despite ambiguity persisting in financial markets and the wider economy, Somani argued that investing remained a good strategy for those looking to get the most out of their income.
“I think in general, you have to think about your life goals,” said Somani, who also heads up the U.K. division of Chase’s investment platform Nutmeg.
“History shows you that time in the market is more important than timing the market,” he said. “I think all CIOs and all experts in investing would say be disciplined about investing, be clear about what money you want to set aside for the long-term goals, and then invest systematically and leave it with experts.”
Asked whether that applied to retail investors or those jumping on so-called meme-stock trends, Somani told Fortune that he would “never say anything is a bad or a good idea.”
“Different customers will have different appetite to do different things,” he explained. “There are some for whom retail trading is [like] gaming, that gives them a high, but as long as they understand what risks they are getting into, [it’s okay].”
However, he noted that regulated banks like JPMorgan offered expertise and could invest in assets that suited clients’ risk appetite and investment time frames.
“When I have a toothache, I don’t try to sort it out myself, I go to the specialist,” he said. “I think keeping that long-term view, trusting your money with the experts who will help you navigate these markets is probably better, I would say, in these uncertain times, than trying to do it yourself.”
Przemek Gdanski, CEO of investment bank BNP Paribas’s Polish division, agreed that investing was more complicated than some retail investors believed, noting that it was not a get-rich-quick scheme.
“If it was so simple, the world would be dominated by millionaires, and it’s not,” he told Fortune at the MoneyLive Summit. “Stock investing is complex. It requires expertise, it requires time, it requires focus, and even that does not guarantee tremendous success.”
However, he added that he was pleased to see more people taking an interest in financial markets.
“I like the idea that people are getting accustomed to investing in a more advanced way than just placing money in bank deposits,” he said. “So do it, but limit the amount you’re investing by yourself; try to enhance your expertise. Listen to the experts, talk to them, and be successful, if you can.”
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