It can be difficult for even the most savvy investors to cut through the noise of financial advice, market predictions, and mixed economic signals. So let’s keep it simple: where should you invest $10,000 today in these market conditions? I spoke to five financial experts with different perspectives and roles to hear their advice.
Before you even think about where to invest, you want to make sure you have three to six months of living expenses saved in an emergency fund and that you’ve paid off all high-interest loans. Also, these experts are not talking to day traders. They have in mind a time horizon of seven years or more, which is enough to cancel out the effect of short-term market gyrations.
1. Jennifer Foster, Co-Chief Investment Officer and Equity Portfolio Manager at Chilton Trust:
Foster explained that investing in companies that have a “catalyst on the horizon” is a strategy to mitigate volatility during a tumultuous market period like the one we are experiencing now. This means looking for companies that have a probable positive event, such as a growth opportunity, in the near future. Foster also has a standard set of metrics that he uses to evaluate companies: They must have strong returns, growth opportunities and strong cash flow. He suggested that investors view Canadian Pacific Railway (CP) as a stock that has competitive advantages, reliable earnings and substantial cash flow. “CP has excellent operations, strong management and serves customers as a provider of low-cost, energy-efficient essential freight transportation,” he explained.
What’s on the horizon for CP? “He hopes to complete the acquisition of Kansas City Southern Rail within the next six months, which will create the first continuous transnational rail network, reaching every coast of North America,” Foster explained. The company plans to build single-line routes that would create lower-cost alternatives to commercial transportation and reduce carbon emissions. Although the transaction has not yet been completed, Foster believes that regulators will support the acquisition. “In volatile market conditions, I encourage investors to look for high-quality companies with catalysts that can result in value creation,” he said.
2. Rayna Lesser Hannaway, portfolio manager and analyst at Polen Capital:
Cybersecurity is in fashion at Polen Capital. “[Cybersecurity risks] they are a problem that companies cannot skimp on. If you want to be resilient as a company, you have to stay vigilant when it comes to security,” Hannaway explained.
He suggested investing in two specific cybersecurity companies: Qualys and Dynatrace. Qualys is a cloud-based software company that provides clients with visibility into where their IT systems are susceptible to cyberattacks. “The company is really known for its accuracy and scalability, they have been very smart over time. They listen to the needs of their customers and are investing their R&D dollars in the right areas,” Hannaway explained. She added that the company is only experiencing high growth rates, but is also backed by impressive profit margins. “Long term, for Qualys, we think they can sustainably grow their revenues and earnings by at least 15% per year, for several years, while also turning those earnings into really strong free cash flow.” said.
Another cybersecurity company that Hannaway recommends is the software company Dynatrace. According to Hannaway, the company is growing at more than 30% a year and has a free cash flow margin of 29%. “Whether it’s Dynatrace or Qualys, the way I would think of it is that these are not solutions that you can turn off. People are very concerned right now about where they might cut companies. You can’t reduce security,” he said.
3. Westwood Chief Investment Officer Adrian Helfert:
Helfert suggested that those looking to invest now could turn to energy. “It seems to me that a lot of investors are still underexposed to the energy sector, and not just oil and gas, but also green energy.” He explained that, especially as more businesses turn to sustainable energy production, increased government and consumer investment in these areas will drive industry growth in both traditional fossil fuel and renewable energy sources. “I would say find a good fund that has strong exposure and ideas around energy investing,” he said.
4. Tori Dunlap, personal finance educator:
Dunlap focuses on personal finance education for women and has 2.2 million followers on TikTok. Sometimes the simplest solution is the most effective: “If I was personally given $10K to put in the market, I’m putting it in a low-cost index fund like Vanguard Total stock Index Fund,” she explained.
“[I]Investing is a long game, years if not decades, and you haven’t really “lost money” unless you sell,” he stressed.
5. Milan Singh, personal finance educator:
Singh, whose financial advice is popular on TikTok, where he has 2.4 million followers, said he tells investors to go for blue-chip stocks that deliver consistently strong returns. But he thinks how you invest is just as important as what you invest in. He suggested putting money into a Roth IRA retirement account invested in the S&P 500 index. The benefit of a Roth IRA is that contributions are only taxed when they’re deposited into the account, so the money grows tax-free. . A fund that invests in the S&P 500 is the safest bet for the average investor looking for stable returns. “For most people, for the average person, the S&P 500 is going to be the best bet,” he said.
He added that investors looking to invest in any company need to be well versed in the industry so that investors can understand the business model. “If you want to do a little digging, individual companies potentially get a higher return. Research the companies you’re already using products from,” he suggested.
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