Title: Investment Advisors Predict a Shift in Investment Strategies for the Next Decade
Subtitle: Experts propose portfolio adjustments to tackle inflation and maximize returns
Investment advisors and wealth managers are presenting a cautious outlook for the next 10 years, suggesting that investors will need to adopt new strategies due to changing market dynamics. Charles-Henry Monchau, Chief Investment Officer at Swiss private bank Syz, has warned against making long-term investment decisions based solely on recent history, emphasizing the likelihood of prolonged higher inflation.
To optimize returns, Monchau recommends allocating a significant portion of long-term investment portfolios to global equities. He suggests that investors hedge against inflation by implementing a nimble asset allocation approach, periodically adjusting the balance between stocks and cash. Additionally, Monchau advises incorporating assets such as Real Estate Investment Trusts (REITs) and commodities in order to diversify portfolios. To further mitigate risk, he proposes dedicating a portion of the portfolio to illiquid alternative investments.
Monchau sheds light on European Long-term Investment Funds (ELTIFs) as an attractive route to accessing previously restricted private markets. These funds are seen as a viable option for adventurous investors, with Monchau recommending allocating up to 50% of a portfolio to ELTIFs.
Jamie Cox, financial planner at Harris Financial Group, shares Monchau’s sentiment, predicting that international stocks will outperform U.S. stocks in the coming decade. Cox attributes this forecast to rising rates and inflation, which are poised to reshape the market’s dynamics. To attain better returns, he suggests focusing on high dividend stocks in sectors such as consumer staples, telecoms, and energy.
Cox advises individuals who are more than 10 years away from retirement to consider having a 100% equity portfolio. To maximize returns in this scenario, Cox recommends opting for low-cost index Exchange-Traded Funds (ETFs).
For investors seeking income during retirement, Cox recommends actively managed funds to diversify the risk of loss. This strategy aims to provide regular dividends while spreading investment across different assets, consequently reducing the potential downside.
As the investment landscape undergoes significant changes, these expert suggestions aim to equip investors with the knowledge to navigate the evolving financial climate successfully. By actively reassessing investment strategies, individuals can adapt to the new decade and potentially achieve optimal returns while effectively hedging against inflationary pressures.
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