Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 03, 2017

4 Investment Tips for 2017

With the New Year comes new investment themes. The sectors/countries/industries that outperformed in 2016 may not necessarily outperform in 2017. In 2016, the top three performing sectors in the US were Energy (+27.4%), Utilities (+23.5%), and Financials (+22.8%). From a country standpoint, the best performers were Brazil (+38.9%), Canada (+17.5%), and the UK (+14.4%). The US wasn't far behind, however, posting a solid 12% return for the year (S&P 500).

It is rare in the equities markets for the same category or sector to outperform two or more years in a row. Leadership often changes hands, and in some cases the best performing sector or country in one year can be the worst performer the next. That's why it makes sense to diversify across many sectors, industries, and countries when you invest. That way, you can give yourself a better chance at capturing the best performing area of the market and not get too weighed down by the lagging parts. Diversification helps to smooth out returns over time.

Now, onto the investment tips. The first tip is for investors to have as much equity exposure as they're comfortable with (from a risk tolerance perspective) and in accordance with your investment objectives. If you're young, have appetite for risk, and are looking for long-term growth, I'd recommend taking a full allocation to stocks.

In the equity portion of investor portfolios, I think there are four areas that could stand to outperform:

Investment Tip #1: Overweight to US Financials

There are two tailwinds brewing that could give US Financials (specifically, large banks) a boost. The first is the Trump Administration's promise to roll back regulations on the industry, namely those associated with Dodd-Frank. Looser regulations could inspire banks to take more risk, which could ultimately lead to better earnings. The second tailwind has to do with the yield curve. Longer term bond yields rose in the months following Trump's victory, perhaps as the market started to price-in the possibility of higher inflation in the coming year. As bond yields rose, the yield curve got steeper, and a steeper yield curve is good for banks. The steeper the yield curve, the higher the net interest margins for banks.

 

 

Investment Tip #2: Exposure to Europe

For the first time since 2008, the Euro-area grew at a faster pace than the US. Brexit was a hit to the European Union, but the effects aren't likely to be felt until 2019 or even later. The other factor to watch are elections in Germany, the Netherlands, France, and Italy - all of which will inform us whether the populist movement really has legs. Populist victories would mean a threat to the economic order of the European Union, which could rattle markets. My guess: the anti-euro parties won't gain big victories and the uncertainty around the viability of the European Union will fade. Markets should rally on that news and the area should continue to expand. 

Investment Tip #3: Overweight to Industrials

The Trump Administration has promised to spend significant money to rebuild roads, airports, and potentially a wall bordering Mexico. If his plans go through or some version of them passes, that could mean some fresh activity for Industrials companies. 

Investment Tip #4: Overweight to US Midcap Companies

Trump's "America First" policies may end up resulting in some trade barriers and tariffs against foreign goods entering the US. Those policies, and a stronger dollar, could lead domestic companies to outperform multinationals. You tend to find the pure domestic companies in the small- to mid-cap space, and I'd favor Midcap over small-cap. Small caps tend to outperform early in economic cycles, and we're already entering the eighth year of this one. 

For more investment ideas, check out the Artificial Intelligence tool on tickeron.com. It can generate investment ideas that might surprise you - and make you some money.

Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
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Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
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Edward Flores's Avatar
Edward Flores
published in Blogs
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How to Become the Millionaire Next Door

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Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
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Sergey Savastiouk
published in Blogs
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Abhoy Sarkar
published in Blogs
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Rick Pendergraft
published in Blogs
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Sergey Savastiouk
published in Blogs
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Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
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US unemployment rate jumps to 14.7%, the highest in series history

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