Volatile markets, inflation reaching new highs and the risk of recession are making things difficult for investors at the moment. “Given the next 10 years, the forces that drove the rapid outperformance of growth over value are unlikely to be repeated,” Paul Danes, head of asset allocation at Bruin Dolphin, told CNBC. “Bond yields are at a structural low, and relative valuations remain high. Regulators are becoming more focused on reining in the already dominant mega platform companies.” But there are plenty of opportunities, according to a number of market experts, especially when it comes to investing for the long term. Here, CNBC PRO asks them where they can invest with a decade-long schedule. Where to invest For Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, a 10-year investment horizon could allow investors to take on more risk. “One option is to invest in funds with a focus on smaller companies in emerging markets, for example, where there can be potential for greater growth,” she told CNBC by email. But she stressed the importance of diversification in terms of sectors and geographies, as well as taking into account potential political volatility and regulation in emerging markets. Emerging markets may look attractive at this timeline, said Vincent Mortier, chief investment officer at Amundi Group, the asset manager. He noted that uncertainty about stocks “remains high,” and as such recommended looking at different assets to invest in.” [emerging market] “In terms of currencies, we continue to have a positive view of the US dollar versus the euro,” he told CNBC via email. Amundi – Europe’s largest asset manager, with $2.247 trillion under management – favors the US over Europe, and remains neutral in emerging markets, Mortier said. He added that investors could also view “real assets” (or physical assets, such as real estate and commodities) as a way to combat inflation in the long run. Streeter of Hargreaves identified Lansdown ESG (or Environmental, Social and Governance factors) as another matter to consider. “It would be helpful to look at funds that focus on ESG, and focus on larger tech, pharmaceutical or financial companies aiming for long-term growth in a responsible manner.” She cited British healthcare firm Smith & Nephew as an example, which she said was set to benefit as hospitals catch up on delayed operations due to a pandemic. “In particular, there should be great potential for the group’s business in sports medicine and orthopedics,” she said. Big tech companies Despite the huge swings in technology over recent months, big US names are likely to be able to handle inflation in the long run, according to Stratter, who picked Microsoft, Apple, Amazon and Alphabet. “This is partly because they have the ability to withstand large piles of cash to count on, but also because of the power of their brand’s pull, and the fact that their technology infiltrates every part of our daily lives,” she told CNBC by email. Streeter added that Microsoft “makes the software the world doesn’t know how to live without,” and it loves gaming revenue as well as its cloud business. Read more ‘We see a clear role for alternatives’: Professionals give their advice on how to trade in volatile market Goldman Sachs says it bought these global stocks to play a $900 billion electric vehicle opportunity — would you name one with a 50% rise in new value stocks? Here are the 10 cheapest names in tech, however, Amundi’s Mortier sounded a cautionary note about Big Tech, noting that performance at the top five companies has waned. “We believe this trend will continue in the coming years as the growth of the largest companies matures, regulations increase, and returns are sought elsewhere,” he told CNBC by email. The tech-heavy Nasdaq is down about 28% since the start of the year. Contrasting Opinions When asked if he has any conflicting opinions on where to invest, especially over 10 years, Danes said the Chinese market is one that Bruin Dolphin believes will provide “relatively strong gains in the long run.” While the Chinese government has clamped down on tech giants, for example, by introducing antitrust guidelines and focusing on “shared prosperity,” Danes said this “arguably is now fully reflected in valuations.” “The prevailing sentiment in the market toward China right now is fear. As Warren Buffett says, you want to be greedy when others are afraid. There is plenty of room for investors to adapt to China… While the Chinese authorities are more in control, they still will remain A very innovative and entrepreneurial niche. Productivity growth is likely to remain relatively strong,” added Danes. What to ask your financial advisor “The question to ask an investment advisor is whether your investments still fit your circumstances, if your financial situation or retirement has changed or if you have a new goal for your investments,” Streeter said. Investors should also consider their attitude to risk and whether their portfolio needs to be adjusted accordingly. “Rather than looking at the short-term performance of particular investments, it is important to look at a longer time horizon, ideally at least 5 years, rather than being drawn to the twists and turns in short-term performance. Investors should also ask what the relative costs are,” she added. for their investment.
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