If you want growing income for life, now is the time to pounce
Recession? Where to put your money now
Gloom in the markets means great opportunities, if you've got courage and patience.
Want to improve your returns without increasing your risk?
One answer is tilting your portfolio heavily toward international stocks. As always with a sound portfolio, the benefits will materialize over a number of years. But the time to start is now.
In the past two years foreign stocks have wildly outperformed U.S. equities. European stocks soared at a 23% annual rate in 2006 and 2007, while emerging markets jumped 35% a year. In 2008, however, both markets have suffered sharp corrections, as have equities worldwide.
The EAFE index of big-cap stocks worldwide now looks like a bargain: Its P/E stands at under 14, far below multiples in the U.S.
Not all foreign stocks deliver diversification. Players like Sony (SNE) or Unilever (UL) are fully global - they simply mimic the performance of other international colossi like Coca-Cola and IBM. "To get diversification, you need to go to the less liquid part of the market, to small-cap stocks," says Dan Wheeler of Dimensional Fund Advisors, a pioneer in index funds.
Take a chance on battered stocks
Sure, it takes courage, but the best investors pounce when sectors are bloodied and expectations in the cellar. Two reviled sectors: banks and homebuilders.
The argument for buying them selectively is compelling, for this reason: They pass the test of being genuinely cheap. When it comes to banks and homebuilders, the market's expectations are extremely low, hence easy to beat.Lets take homebuilders: Keep in mind, stocks usually rebound not when news in a stricken sector gets better, but well before. So it's a good time to start building stakes in the battered builders, a bit at a time, via dollar-cost averaging. Despite all the chaos in real estate, Americans aren't going to stop buying homes in the future, and the future is what counts.
According to a study by Rex Sinquefield, DFA's co-founder, investing heavily in stocks that track local markets and in value shares yields investors an extra two points of return, without increasing volatility.
With that in mind, we offers a variety of strong choices, available through financial advisors.
Winning in these treacherous times is as much about psychology as following the rules. It takes guts to be daring when markets are melting down. But that's the quality that makes great investors. As Warren Buffett says,
"Be fearful when others are greedy and greedy when others are fearful."
Now's a time when greed, Buffett-style, is good. Just make sure your greed is highly selective.
Our financial department services offer solutions in order to track, leverage and optimize investment dollar using our IT automation plans and 20/20 reporting tools. This includes electronic banking interfaces, identifying clients investment needs with proper risk assessment, and mapping those needs to desired "Return On Investment (ROI)" using financial tools and techniques.
We also allow clients to develop financial strategies and do back tracking to evaluate performance of various strategies. As part of our process to resolve and improve performance of the portfolio, we build statistical models supported by the business strategies and underline processes.
Models are derived based on not only the internal business factors but external variables including market conditions, economical and other global varibales that influences the overall financial objectives of the CEOs, CFOs and mutual fund managers.