Why share prices and bonds look good for investors now – a chief investment officer explains
Investors find themselves in an unusual position right now. Concerns abound over everything from politics, to war and the health of major economies, yet the global stock market is riding high
Dig a little deeper though and there are worries there too, as returns are increasingly concentrated on the US stock market’s dominant Magnificent Seven.
‘There’s a lot of risks out there but at the same time, if things seem risky that typically leads to opportunities’, says Tom Becket, co-chief investment officer of Cannacord Wealth.
He joins This is Money’s Simon Lambert on the Investing Show to explain how he builds portfolios to protect investors against the risks and help them profit from those opportunities.
Becket says that while investors are right to be wary, they also risk being too pessimistic and that aside from some very highly valued pockets of the market, share prices largely look attractive.
He says investors should also look to bonds now that interest rates have risen back towards more normal levels.
He says: ‘Everyone says you’ve got a long-term time horizon, you should just own equities. That’s a view, but I think at the moment you could probably make similar returns from fixed interest as you can from equities.’
Becket also explains what the job of a chief investment officer entails and what he thinks investors need to consider about their own portfolios, ambitions and returns.
He says: ‘Ultimately, I believe the best arbiter for investment success is inflation. If you generate a return above inflation, then that should be your ultimate guide to investment success.
‘It’s all about the concept of generating real returns. I would suggest that would be the starting point for everyone thinking about investing for the future.’
