The current market crisis is providing good investment opportunities in the equity markets, according to PM Capital chief investment officer Paul Moore.
"If you step back from the noise there are many opportunities. Many businesses are selling at record valuation lows," Moore said at the Morningstar Investment Conference in Sydney on Friday.
"The best investment opportunities are when market visibility is at its worst. When markets are clear it is harder to find opportunities that are priced as being undervalued."
Moore said the yield curve presented a lot of opportunities.
"For advisers the yield curve opportunities in what you can invest in should have you salivating. You will never have a better opportunity to give your clients a spread above cash after fees," he said.
Banks will also eventually offer value in the market.
"In the future there will be less competition in financial services, there will be more capital available for banks, but bank stocks will sell at higher valuations," he said.
Investors who are clamouring into term deposits on the basis that these deposits are government guaranteed are missing out on opportunities in other guaranteed investments.
"Term deposits are offering about 2.9 per cent, but government guaranteed bank debt is also guaranteed and yet you can get an extra 80 to 150 basis points on government guaranteed bank debt," Moore said.
However, he said government bonds are in a bigger bubble than the tech bubble of 2000 and the housing bubble of 2006.
"The Australian government has embarked on a spending spree and borrowed heavily. They have guaranteed bank lending, bank deposits and state banks. This increased leverage could see a downgrade of government bonds to junk status," he said.
