Veramente larticolo di Bloomberg parla di 10.000 dollari: mi sono permesso di tradurlo in euro :D
Where to Invest $10,000 Right Now
Six market pros point to promising investment areas.
Illustration: Steph Davidson
By Suzanne Woolley
June 20, 2016 | Updated on October 15, 2018
Ten years after financial markets around the world tumbled toward chaos, they have an anniversary present for you: more stress.
After a gain of nearly 7 percent in the third quarter, October ushered in a rout in the U.S. equity markets. The Standard & Poors 500 index plunged 6.7 percent from Oct. 3 to Oct. 11, with Asian and European equities following suit. On Oct. 12, the S&P 500 bounced back with a 1.4 percent gain.
The equity market drama comes amid recent violent surges in Treasury yields and rising trade tensions. As earnings season begins, fear is mounting that these forces will cut into corporate profits and sound the death knell for growth stocks. Meanwhile, a strong U.S. dollar and heavy debt loads in many emerging markets, together with the trade turmoil, are leading to lower estimates for global economic expansion.
Its a challenging periodand an opportunity. The markets inevitable cycles, however painful, are made for disciplined investors.
To generate some ideas about where to invest a $10,000 windfall right now, we called on our panel of market experts. Two new names are on the roster this quarter: Jim Hamel of investment firm Artisan Partners and Joe Davis of Vanguard Group. Davis replaces Vanguards Joe Brennan, who recently became the companys first global chief risk officer.
Our experts recommend investments ranging from digital payment companies to bargains in Japanese and Korean equity markets to high-dividend consumer staple stocks and long-dated U.S. Treasury bonds.
Before exploring their suggestions, its wise to do a simple portfolio checkup. Are you diversified across asset classes, geographies, and industry sectors? Do your mutual funds have large overlaps in trendy technology stocks, leaving you particularly exposed to the FAANG bloc of Facebook, Apple, Amazon, Netflix and Google parent Alphabet?
For a broader look at ways to stay on a firm financial footing, take a look at The Seven Habits of Highly Effective Investors.
Many of the investing themes laid out by our experts are baked into the mutual funds or investment portfolios they manage. Bloomberg Intelligence ETF analyst Eric Balchunas offers exchange-traded funds (ETFs) as a rough way to play those themes, and tallies the performance of his ETF picks last quarter.
One guarantee: There will be more stomach-churning moments in the years final quarter. In those moments, the smartest move starts with a deep breath.
Russ Koesterich
Portfolio manager, BlackRock Global Allocation Fund
Now Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017
Asia on Sale
As many markets started the year at already-full valuations, investors could be forgiven for thinking that there are few bargains left. Interestingly, many Asian equities appear really cheap.
For example, as of the end of September, Japanese equities remain the cheapest in the developed world. The Topix Index (TPX) is trading at 1.3 times price-to-book (P/B), less than half the level of the S&P 500. The current discount is close to the widest since 2012, a period that preceded a three-year, 150 percent rally.
The Asia discount applies to a number of emerging markets as well. South Korean equities remain not only the cheapest in this category, but looking across equities, sovereign debt and credit, they are by some measures the cheapest asset class. The current valuation represents a 35 percent discount to the rest of the emerging markets, the largest discount since the Asian financial crisis.
Historically, many of these markets, especially Korea, have traded at a discount. The same is true for Japan, but while the discount may have been justified in the past, much has changed in recent years. Japan has witnessed a significant improvement in both corporate governance and profitability. The return on equity for Japans Topix index now stands at around 10 percent, close to a multi-decade high. When you factor in Japanese monetary conditions that are still ultra-accommodative, the low equity valuations seem even harder to justify.
Rather than resting on fundamentals, todays Asia discount can arguably be attributed to three trends: stellar U.S. earnings growth, a stronger dollar as a headwind for emerging markets stocks, and rising trade frictions.
While trade and the U.S. dollar remain real issues, these concerns already appear reflected in equity prices. As a result, Japan and much of Asia appear to be that increasingly rare find: a bargain.
Way to play it with ETFs: The iShares MSCI Japan ETF (EWJ) is far and away the largest Japan ETF, at $17.4 billion in assets, said Bloomberg Intelligence ETF analyst Balchunas. It has a fee of 0.49 percent. For cheaper ETFs that basically track the same stocks he likes the Franklin FTSE Japan ETF (FLJP), which charges 0.09 percent, and the JPMorgan BetaBuilders Japan ETF (BBJP), which charges 0.19 percent.
Performance of last quarters ETF plays: Balchunas highlighted the SPDR S&P Emerging Asia Pacific ETF (GMF). It fell 2.4 percent in the third quarter.
Sarah Ketterer
Chief executive officer and fund manager, Causeway Capital Management
Now Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016
Cash Today Beats Cash Tomorrow
High-dividend-yielding, undervalued stocks may finally reign over growth stocks. In this global environment of gradually tighter monetary policy, the cash that a company returns to its shareholders in the next few years may be much more valuable than a potentially unfulfilled promise of rapid growth in profits many years ahead.
The massive growth in liquidity created by global central banks after the financial crisis has stalled in 2018, and will likely shrink in 2019. Meanwhile, valuation spreads between expensive and cheap stocks, measured by relative price-to-earnings ratios, are at extremely wide levels vs. history. In the past 20 years, these especially wide valuation spreads typically led to a narrowing of the gap and subsequent outperformance of cheap stocks.
The global consumer staples sector contains some of the cheapest, highest-dividend-yielding stocks. Many of these companies generate mountains of near-term cash flow. Within staples, the most maligned and possibly misunderstood segment is tobacco. Both U.S. and European-listed large-cap tobacco stocks trade at sizable discounts to their history. The discount may stem from investor concerns about the FDAs tobacco regulation, shrinking U.S. cigarette volumes, a surge in demand for alternative products such as e-cigarettes and weakness in emerging market economies and currencies.
Much of this may be transitory, leaving investors with well-managed consumer marketing giants able to transition to a growing e-cigarette category. Heavily-taxed (and clearly very unhealthy) combustible cigarettes will likely disappear in the years ahead, replaced by less harmful forms of nicotine delivery. The more that global regulators focus their efforts on vapor, the better for these large incumbent tobacco companies, which are better able to absorb the costs of regulation than new entrants. Even in the shift to noncombustible products, global tobacco giants have the financial strength and prolific free cash flow generation to reward shareholders today and invest for tomorrow.
Way to play it with ETFs: Balchunas suggests the First Trust Morningstar Dividend Leaders Index Fund (FDL) which screens for stocks that have shown dividend consistency and then picks the 100 highest-yielding names. Its heavy in consumer staples stocks, with big tobacco companies among top holdings. The $1.4 billion ETF charges 0.45 percent.
Performance of last quarter's ETF plays: Balchunas pointed to the SPDR Oil & Gas Equipment & Services ETF (XES) as a way to play Ketterers suggestion of oilfield services companies. The ETF rose about 1.5 percent in the third quarter.
Ian Harnett
Chief investment strategist, Absolute Strategy Research
Now Q3 2018 Q2 2018 Q1 2018
Go Long on Treasuries
U.S. Treasuries have seen a perfect storm these last few weeks. The key question for investors is whether they are now a buy or a sell. We say buy!
The Treasury sell-off started with the short end of the yield curve, as the Federal Reserve hiked rates. The hawkish tone was bolstered by a record number on the ISM Non-Manufacturing index, which measures business conditions in nonmanufacturing industries. Inflation fears intensified as unemployment fell to 3.7 percent, its lowest level since 1969, and OPEC promised continued supply discipline, boosting oil prices. Finally, yields on very long-dated Treasuries went well above long-held ranges in the wake of Federal Reserve Chair Jerome Powells suggestion that this economic cycle might persist effectively indefinitely. As a result, U.S. 10-year yields moved toward 3.25 percent and the 30-year pushed toward 3.45 percent.
Such yields will be hard to maintain. Although U.S. growth currently remains healthy, rising real [inflation-adjusted] rates and a stronger dollar will begin to challenge activity, as will higher oil prices squeezing real incomes. The rest of the world will also suffer as dollar strength increases the funding costs for the $12 trillion of dollar-denominated debt raised outside the U.S.
For us, therefore, the expectation of rising prices on Treasuries makes those with yields above 3 percent attractive now. Slower global growth and an inability of OPEC to maintain its supply discipline will likely see West Texas Intermediate crude prices closer to $65 than $75 by yearend. We suggest buying very long-dated bondsall the way up to the 30-yearwith yields close to 3.4 percent, since even the hawks dont expect more than four rate rises in the coming year.
Bonds also look attractive relative to equities. The recent weakness in equities suggests some investors are already selling them to lock in additional income. Alternatively, we suggest buying bond-sensitive equities. Although health-care stocks have already done well, utilities, telecoms, and food producers have yet to catch up.
Another equity strategy is to buy U.S.-exposed stocks in markets that have sold off aggressively for other reasons. A basket of U.S-exposed euro-zone stocks will likely perform well, and with Italian equities stressed due to domestic politics, companies such as Fiat-Chrysler Automotives N.V. and Luxottica Group SpA, which both have over 50 percent of their sales in the U.S., could provide a cheap route to buying U.S. earnings.
Finally, in a world where global growth is slowing, food producers typically outperform industrial metals, and with expectations of a new El Niño this year, prices on soft commodities [commodities that are grown rather than mined] should rally.
Way to play it with ETFs: Balchunas points to the $6.5 billion iShares U.S. Treasury Bond ETF (GOVT) which invests along the entire yield curve. It charges 0.15 percent.
Performance of last quarter's ETF plays: The iShares 20+ Year Treasury Bond ETF (TLT) and the Consumer Staples Select Sector SPDR ETF (XLP), Balchunass choice to play on the consumer staples theme, rose 5.2 percent in the third quarter. The iShares 20+ Year Treasury Bond ETF (TLT) fell 3.4 percent.
Jim Paulsen
Chief investment strategist, the Leuthold Group
Now Q3 2018 Q2 2018 Q1 2018
Focus on Defense
The economic recovery is close to becoming the longest ever in U.S. history, and valuations are relatively high across the stock market. Inflation/overheat pressures are starting to surface, the 10-year bond yield recently rose above 3 percent, and the Federal Reserve is regularly tightening monetary policy. Although traditional recession indicators are not yet flashing red, several signs suggest that buy-and-hold returns from U.S. large-capitalization stocks are probably in the mid-single-digit range for the duration of this bull market. So while its not yet time to exit the stock market, its time to focus more on defense.
Even though yields are rising, balanced investors should reduce their equity allocations in favor of bonds. From here, a continued rise in yields may start to harm the stock market more than the bond market. By the end of this year, cash will yield about 2.5 percent, offering about one-half the expected longer-term return from the stock market without the downside risk. Therefore, holding some cash also seems attractive today and gives investors some dry powder should the stock market suffer a correction. Gold is another alternative investment with increasing merit. It is down about 10 percent since last spring and has just recently shown signs of bouncing back.
Finally, consider selling some of those popular technology and consumer discretionary winners and moving toward an overweight in defensive equity sectors including utilities, consumer staples and real estate. Defensive investments like the S&P 500 Dividend Aristocrats Index and the S&P 500 Low Volatility Index have begun matching the stock markets overall performance in recent months. They should participate if the stock market keeps climbing, and preserve capital if the market hits an air pocket.
Way to play it with ETFs: For a gold ETF, a new breed of cheap offerings in the market include the GraniteShares Gold Trust (BAR) and the SPDR Gold MiniShares Trust (GLDM), said Balchunas. Both have assets of around $250 million and charge 0.18 percent.
Performance of last quarter's ETF plays: Balchunas chose Invesco DB Optimum Yield Diversified Commodity Strategy ETF (PDBC), which gained 3.7 percent in the third quarter, and the JP Morgan Diversified Alternatives ETF (JPHF), which had a 0.08 percent loss.
Jim Hamel
Portfolio manager, Artisan Global Opportunities Fund
Now
Play Digital Payments
Even after the recent market drop, a case can be made that after a decade-long bull market valuations still look stretched. But in our long-term view, that doesnt preclude finding solid franchises that are well-positioned relative to a meaningful secular trend. One area weve recently found interesting surrounds the ongoing global transition to digital payments.
There are a number of tailwinds contributing to this trend. First, were seeing rapid growth in e-commerce, which requires that customers be able to make secure digital payments. The growth in cross-border transactions and the general impact of an increasingly globalized marketplace are helping accelerate this trend. Second, technological innovations that simplify cash transactionssuch as Square and Uber, as well as point-of-sale devices in areas theyve not historically been, such as taxis, vending machines, parking meters, etc.are helping drive digital payments growth.
A third factor has been emerging economies growing push to bring their populations into the formal economy. One way this has manifested itself has been deliberate attempts on the part of some governmentsmost notably and recently Indiasto demonetize their economies. The move toward digital payments brings more consumers into the formal economy at a time when those payments are becoming faster, more efficient, and ultimately more secure. A final factor has been the growing volume of global travel, which is simpler when transactions are facilitated digitally. [The largest holdings in the digital payment space in Artisan Partners portfolios include Visa Inc., Pagseguro Digital Ltd., Worldpay Inc. and Q2 Holdings Inc.]
Way to play it with ETFs: Balchunass pick is the ETFMG Prime Mobile Payments ETF (IPAY). It is focused solely on capturing the growth in digital payments. It tracks the established credit card companies as well as newer firms, and is international in scope. The ETF, with $500 million in assets, has an above-average fee of 0.75 percent.
Joe Davis
Global chief economist and head of investment strategy, Vanguard Group
Now
Ride out Market Cycles
Do the Feds plans for continued rate hikes signal trouble for bonds? We dont think so. While rising short-term interest rates may sting, these losses will be offset by higher future returns as interest payments are reinvested at higher yields. And despite the recent volatility, we dont expect a big impact on long-term bonds. Long rates are less influenced by the Fed than by inflation and the long-term growth outlook.
While a multilateral trade war seems unlikely in 2019, significant risks remain in the U.S.-China trade conflict. We havent changed our outlook on either country, as we have yet to see any major reaction to the current tariffs in the economic data. However, should the U.S. go forward with further tariffs in January, we may begin to see material effects in select sectors and lower market sentiment overall.
What about equities? While some equity investors may be spooked by higher rates impact on earnings and overall growth, Vanguards research has shown that in the last 50 years, equity returns remained positive during 10 out of 11 previous rate-hike periods. This time may be different, of course, but market timing is the wrong strategy.
A better approach is to stick with stocks through the market cycles to take advantage of discounts in the market and benefit from their potentially higher returns over the long term. With the large return differentials between the U.S. stock market and equity markets in the rest of the world, consider rebalancing into non-U.S. stocks if your portfolio has strayed from your target allocation. And even if bond returns are more muted, fixed income will continue to moderate volatility in equities and other assets.
So what should you do with $10,000 today? If you already have a diversified mix of stocks and bonds, more of the same.
Way to play it with ETFs: Balchunass pick is the Vanguard Total Stock Market ETF (VTI), a classic buy-and-hold ETF. The broad market fund covers the entire U.S. stock market. It charges 0.04 percent and recently crossed the $100 billion mark in assetsonly the third ETF to ever do so.