In 2020, equity benchmarks had a strong showing around the world. Despite the strong performance, many investors didn’t seem to have a great experience. This year has had economic, geopolitical, and regulatory uncertainty, leaving investors at a loss for how to position themselves to avoid these risks.
Navigating the Uncertainty: Strategies to Protect Your Portfolio
When it comes to navigating uncertainty, Chris Hogbin and Nelson Yu suggest individual investors look for high-quality, well-diversified companies with strong moats and clean balance sheets. Additionally, investors should diversify and spread out the risk across different strategies to make sure their portfolio is well-prepared for market turns.
What Opportunities Should Investors Look for in 2024?
When considering upcoming opportunities for investors, Yu suggests a combination of value, defensive, and secular growth stocks. As an example for value stocks, Yu highlights manufacturers with consistent profits and potential for growth. Defensive stocks, such as insurance companies, stand to benefit from the rising interest rates. As for secular growth, disruptive companies such as the new energy drink producers, have an opportunity to gain market shares from the incumbents.
Active or Passive Investing: Making the Right Choice
As the environment changes due to increasing interest rates and inflation, the two experts discuss which type of investing is the optimal choice. According to Yu, a passive approach might seem great on the surface, with seven corporate giants making up over 45% of the market, but it’s a bit too concentrated and there is a heavy risk that investors miss out on potential opportunities. Instead, Yu suggests active investing to strive for long-term, risk-adjusted returns for the best results.
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“The Battle of Investing: Active vs. Passive. Which Is Right for You?”
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