Where To Invest, Part 2

Where To Invest, Part 2

over 4 years ago2 mins

Welcome back to this week’s look at investment pros’ current top tips – as told to Bloomberg. With recession warnings flashing and US stock prices stumbling, should Finimizers consider tweaking their portfolios? 🤔

What's going on here?

Last time, we looked at ways to grasp the nettle and diversify your investments through simple exchange-traded funds (ETFs).

For long-term investors, lower stock prices can provide an opportunity to pick up shares of exciting companies on the cheap. And that’s exactly what Causeway Capital Management advocates. It points out that the inevitability of 5G and increased industrial automation makes now a prime time to invest in global firms developing that technology: through the Defiance Next Gen Connectivity ETF, for example.

Tasty… and not just the pretzels
Tasty… and not just the pretzels

Relatively risky stocks may not be to everyone’s taste right now. But with interest rates low (and likely headed lower), over 30% of global bonds are currently offering negative yields. Sierra Mutual Funds therefore recommends investors on the hunt for returns consider high-yield corporate debt funds like the Franklin Liberty High Yield Corporate ETF.

These mitigate the risk of one company defaulting by investing in hundreds of ‘em. Only thing is, they may not be a great place to be when the global economy turns really sour… 🤢

What if that’s coming soon?

You might be tempted to pull everything out and just sit on your cash. But with inflation sitting around 2%, the value of that’ll quickly get eaten up.

US inflation over the last decade
US inflation over the last decade

Which brings us right back to where we started. If you’ve already got a well-diversified investment portfolio, the best strategy may well be to grin and bear it when market storms hit. For most investors, small tweaks – a shift towards stocks in dependable industries like infrastructure and perhaps shorter-term government bonds – should be sufficient to provide some return while setting things up for an eventual rebound 😊

Investing like a pro is all well and good – but half of these guys’ last tips ended up losing money last quarter…

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Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

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