2008 and most of 2009 were sheer disaster zones for investors. Some investors lost more than half their investment portfolios, some lost all of it and there were the select few who actually made money, through the economic turmoil. Now, that most experts claim the worst is behind us, it might be time to jump back in the market. However, not without caution. While clients might be skeptical about taking the plunge back into the investment market, we feel that this might be the opportune moment for a lot of individuals. Although plenty of investors have missed out on the massive 50 percent plus gains that the DOW has experienced in the past few months, it is not too late. We put together a few investment strategies that should help individuals with their investing in 2010.
Best Investment Strategies For 2010
- Large Caps To Lead The Way: In the recent past investors have pulled out close to $15 billion out of large cap stocks and out of fear of another investment market crash have invested nearly 4 times the same amount in less risky bond-funds. Historical returns have shown that the long term moving average of returns on stocks are far greater than that of bonds or funds that invest in bonds. Another important point of consideration while investing in 2010 is to remember that US large cap stocks are currently undervalued and this might be the time to start picking up some quality stock prior to their pricing sky rocketing. Our investing advice is to look to buy stocks that have a focus on dividend yield especially those which have more than 2% on offer.
- International Markets: While the US is on the road to recovery, it may be a good investment strategy to adequately diversify your investment portfolio and look to international markets. Let us remember that international markets such as Australia in the Asia Pacific region and funds in the Latin American sector have outperformed the USA by a fair bit. Another point substantiating international investment is owing to the fact that international investment markets are considered more risky, they compensate investor by offering higher dividends and returns. This would be another factor why we believe investors should consider international stocks and funds as part of their investment strategies.
- The Resource Sector: Seasoned investors reckon that the resource sector is probably a safe investment strategy at the moment if you are beginning to feel your way through the investment world. In particular, stocks in the energy sector and mining and drilling sector seem to have more appeal to seasoned investors.
- Precious Commodities: When we say precious commodities what we basically at the moment are talking about gold investment strategies. A lot of investors do not consider investing in gold an investment technically. Gold has always been considered a preservation vessel for wealth and a hedge against geo political risk and other unforeseen market and non-market related forces. Gold is and will always be an excellent protection against inflation, and with the weakened Dollar, its prices being driven higher. It might be a good idea to hold about 10-15 percent of your investment portfolio in gold to add stability and diversification to it.
- Mutual Funds: In light of the fact that prices in the money market are low at the moment it might be a prudent investment strategy to consider investing in quality mutual funds. While picking mutual funds the trick is to remember to select mutual fund managers who aim to provide their investors returns while preserving their capital.
These are some of the basic investment strategies we feel investors should consider while contemplating investing in 2010. However, remember to do your research and ensure that you have taken into account your risk tolerance.
Reference:
- The 3 Best Investing Strategies for 2010 – The Motley Fool