We the Americans have faced a polarized political aura in 2017 due to the US election result, the Brexit and the upcoming votes in Europe. All these shocking events have made it an uncertain place for the investors. As per a recent survey, a quarter of clients of an eminent investment company blamed the disturbed political landscape at the biggest possible challenge for the businesses in 2017 and this has become a thing of concern for most investors. In spite of the localized concerns, the bigger picture should definitely be positive for the investors in the next year.
Reports forecast that the broader backdrop would increase from 3.2% to 3.6% and this hike would partially be driven by certain pro-growth policies in the US. If you’re an investing rut who is relatively new to the field of investment and is often confused about the right moves, here are some tips on creating the perfect investment portfolio for 2017.
Dip into US equities: In spite of the post-election environment, the Americans retain their position which is still overweight. US earnings are expected to rise by 8% in the following year driven by the oil price stabilization, possible fiscal stimulus and the responding monetary policy in the country.
Carefully choose equity sectors: For the American investors, US healthcare and financials should seek advantage from regulation which is much less burdensome and at the same time US tech should experience tailwinds from some new spending areas like cloud computing. For the investors who are not based in America, the Asia Pacific real estate investment trusts provide lucrative yields which are related to government bonds as compared to the global averages.
Choosing emerging market currencies: When the global investment rates are pretty depressed, this can even help make some other emerging market currencies more attractive as compared to the peers of the developed market which are even sensitive to the ups and downs of global growth. The Brazilian real, the South African rand, the Indian rupee and the Russian ruble are some such emerging market currencies.
Equities of emerging market: Stabilizing GDP growth, commodity prices and low global interest rates should offer a boost which will remain consistent throughout 2017.
More focus on yield enhancers: For the taxable American investors, specific holdings in American municipal bonds will keep playing a vital role in spite of the post-election tax changes. The non-American investors would consider those companies offering reliable income in Euro zone, Switzerland, Japan where high-grade bond yields stay extremely low.
Look for alternative investments: In the year 2017, returns from the above mentioned equities and the bonds would be moderate enough. Choose investments within private markets and hedge funds as their returns are not directly related to the assets and hence will most likely diverse your investment portfolio.
Therefore, if you’re about to invest in the different financial vehicles, you should be sure about the above mentioned advice so that you may easily stay on the right track and make the most out of your dollars.