Investment trends for 2023 and onwards
While the last few years have unquestionably been tumultuous from a global pandemic point of view, there is hope for a happier, healthier and more normal future with the stock markets.
The Covid-19 effects felt like the Great Recession along with the Dot Com Bubble experience provided a stark warning for investors.
As many global affairs determine where the strongest investment opportunities lay, Juntoku International discloses the futures outlook.
In the past few years investors were taught that well-established principles, like investing for the long-term with a low-cost diversified portfolio and only checking your investment balance occasionally, are the best advice.
Big challenges remain in place but the global recovery is sustainable, supported by policy, following much of the normal post-recession playbook.
No matter where you choose to put your cash, investors should stick to a refreshingly normal approach after a disordered year.
Juntoku International advises its clients to keep in mind the following.
Europe is poised to rebound
Thought to be the worst period of European performance since the 1980s, experts believe there is potential for a strong bounce back.
The losers will come back
As smaller companies generally lead coming out of a recession, there is a strong case in buying stocks with the lowest expectations. US and European financials, materials and sectors hit hard by COVID-19 such as travel are likely to be in favour.
Tech bets might be off
The big tech stocks dragged up the S&P 500 in 2020 with Microsoft and Google going up 36% each, Facebook was up 40%, Netflix was up 55%, Apple was up 67% and Amazon was over 70%.
What remains to be seen is if the big tech names can continue to rise like rocket ships. If they don’t, will investors look to rotate their money into other tech stocks or into other sectors? Or will stagnated growth drag down the broader market?
Don’t trade the news and overreact
Predictions are hard, but it’s easy to predict something unexpected will happen. That’s why the most important advice is to avoid the temptation to over-focus on the short term.
The best way for most investors to handle volatility is a diversified portfolio of exchange-traded funds (ETFs) tailored to your goal timeline and risk tolerance.