What Investors Could Do to Their Portfolio During This Uncertainty?

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Today’s economy is one marked by heightened uncertainty. As the world recovers from a pandemic that underscored persistent and recurring issues, the World Bank reports that global conflicts like the Russian invasion of Ukraine have worsened economic conditions. Ultimately, we might be seeing an extended period of slow growth and aggravated inflation.

For investors, making crucial decisions is critical to ensuring financial security under such turbulent conditions. With everything going on, it’s important to build a strong portfolio to see you through what could be a prolonged period of uncertainty.

Here are some things that you can do to your portfolio in the current economic climate.

Diversify your Portfolio

Investments are inherently risky, so it’s important to build resilience in your portfolio that can offset losses you might incur in certain markets. This is why you should invest in different asset classes, from stocks to ETFs. Even if you have investments that have performed well for you, it’s important not to pin it all on very few assets. You should also hedge by investing in markets that move in the opposite direction to your most volatile assets. Say, if you have stocks that are known to be volatile, you would also want to invest in bonds or investment funds.


Consider spread betting


Spread betting is a derivative strategy where you can speculate on both rising and falling financial markets, without owning the underlying asset that you’re betting on. Depending on your bet, you would either buy the market to go long, or sell it to go short, and the profitability of your spread would be determined by the accuracy of your bets. FXCM explains that spread betting’s advantages include flexibility, available leverage, market diversity, and ease of trade. As with any form of trading, spread betting necessitates carefully thought out strategies such as breakout, news-based, reversal, or trend market spread betting. If properly executed, aside from being lucrative, spread betting also has the added benefit of being tax-free and commission-free.


Invest in energy

Investing in energy is practically non-negotiable. Since oil is a commodity, it has value as an asset and can be traded as an investment derivative. Even though the oil and gas sector has a tendency to be cyclical, and can be volatile due to external factors that influence its distribution, its prices are always bound to go up. Timing is a critical factor in the successful turnout of your energy investments. But especially these days, the war that Russia waged on Ukraine has caused the stock prices of oil to soar, following its collapse during the pandemic. UBS analyst Giovanni Staunovo states oil will continue to garner demand, and it is only expected to improve further as China reopens and summer travel in the northern hemisphere begins to rise.


Putting money into what you believe in

Real estate investment trusts (REITs) are companies that own real estate that produce income. REIT investments are perfect for diversifying your portfolio and are a good choice in uncertain times since they provide high yields, good values, great profitability, and strong growth rates. REIT specialist Kenny Loh has stated that since the reopening of borders has been normalised, it has not had any adverse effects on healthcare and office REITS, while hospitality REITs look promising. In today’s economic state, the profitability of REITs may be largely beneficial for investors.

Uncertainty can hit any time, but there are always ways to protect yourself from these occurrences. So if you’re aiming for financial security, then it’s important to start making the proper investments now.

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Technology – The Best Long Term Growth Stocks

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Author: Kevin Mercadante

As Warren Buffet said, time in the market beats timing the market. The earlier you start investing, the better it will be for you in the long run. Every individual investor always has the decision between buying individual stocks or investing in an index fund. 

Getting only one stock is similar to gambling if you don’t know what you’re doing or if you’re not an angel investor. On the other hand, an index fund is broad, and all of your assets get diversified, but the profits are too small. Click here to read more. 

For example, if you had invested a couple of dollars into Bitcoin ten years ago, now you would be a millionaire. Many investors say that you need to buy stocks and hold onto them forever, but which are they. 

We’re going to take a look at some of the best options where you can put your hard-earned money and make sure that it works for you while you sleep. There are a few key things that you need to look for before you start investing. 

The first thing is to make sure that the stock is at a reasonable price. If it’s too expensive, it may start losing its value. The next thing to look for is the people that run the company. They need to be transparent, honest, and results-oriented. 

Without those character traits, it’s highly unlikely that a company will succeed. The final thing to look for is the rewards. The returns need to be in your favor to give you the initiative to invest.  

Tech Companies 

As soon as computers and smartphones entered pop culture, their spot in investment portfolios got reserved. They’re going to be a part of this century, and there’s nothing that’s going to change that. Companies like Apple, Microsoft, Amazon, and Google are too big to fail.

They’re the top three when it comes to tech, and no other company comes even close. Let’s start with Apple. They were the first business in the world to have a trillion-dollar market cap. That’s insane. They’re also the largest holding of Buffet’s portfolio. 

Whenever a new iPhone comes out, it’s like a frenzy that takes over the United States. Everyone wants to be the first owner, and even if it’s not that different than the previous model, people are still going to buy it. The same thing is true about their laptops and tablets. Follow this link for more info https://techland.time.com/2012/05/07/six-reasons-why-apple-is-successful/

Steve Jobs did a wonderful job of bringing Apple to the place where it is today. Next on the list is Microsoft. These two companies are neck and neck, each one excelling in its own niche. They were third on the list when it comes to a trillion-dollar market cap, but Bill Gates has been the richest man on Earth for more than anyone can remember. 

The Windows operating system is a staple everywhere, and they keep coming up with new technologies. Amazon changes things up a little bit. Even though they’re competing with Microsoft about cloud technology, they are still the leader when it comes to retail selling. 

Whenever you want to buy something and get it at your doorstep the next day, Amazon is your first choice. Bezos is the richest person in the world, and he’s a financial genius. Even though he stepped down from his position as CEO, his skills and expertise have brought Amazon to the marketplace of the world, and they’re not going anywhere soon. 

Finally, there’s Google. They fall under the company Alphabet, but everyone knows them as a search engine. They recently bought YouTube, and they dominate everything that we search online. Click on this link to read more. 

Have a question that you need to be answered? You go to Google. Want to watch a funny video of a dog falling in the water? You go to YouTube. It will take decades for something else to take their spot, and they’re so big that it’s almost impossible for that to happen.  


There’s an old story about a rabbit and a turtle racing each other. The rabbit was exceptionally faster than the turtle, and it laid down next to a tree to rest. As it slept, the turtle walked. Slowly but surely, the turtle crossed the finish line and beat the rabbit in the race. 

While tech companies are like the rabbit, dividend stocks are more like the turtle. They have smaller profits, but they’re stable and mature. They’re most popular with older investors since they don’t want to take on that much risk. You can go to reviews of Motley Fool Stock Advisor and see why they work so well. There’s no volatility, and it’s true that the best stocks grow with time—most of the companies that are included in these lists payout around two to three percent annually. 

However, if the business is unable to pay off the dividends, it can cut them out for the year. Because of that, the stocks may go down, so you need to be careful in this scenario too. If everything is going well, the dividends can go as high as 10 percent per year. 

The most important thing for you to do is diversification. Don’t put all of your eggs in one basket. The more you diversify, the better it will be for you in the long run. Invest in competing firms because when one fails, the other one picks up the slack. There are many options available; you just need to do your research. 

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3 Dividend Pitfalls for Dividend Seeking Investors

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There is nothing wrong with investing in dividend stocks to generate passive income for your retirement planning. However, it will cause a huge dent in your retirement portfolio if you are investing wrongly. The following are the 3 dividend pitfalls that you have to avoid.

Pitfall No 1: High Dividend Yield is Lagging

Everyone wants to invest in shares which give high dividend yield. It is a no-brainer to choose Share A with a 10% dividend yield over Share B with a 4% dividend yield. However, investors need to be very careful when investing in shares with high dividend yield because ‘dividend yield’ is a lagging number. The high yield could be caused by a sharp drop in the current stock price due to weakening of the fundamentals or poor forward-earning guidance. Investing in such shares may instead cause investors to lose part of the capital invested and receive reduced dividend in the future.

dividend yield - financial alliance

Pitfall No 2: Dividend Pay-out Ratio is Not Guaranteed

There is no guarantee that the underlying shares will continue to pay dividend. The management can change the dividend pay-out ratio due to the company’s profit & loss position, cash flow situation, future expansion considerations and other reasons. Thus, the dividend from Real Estate Investment Trust (“REIT”) is more predictable compared to normal shares, because a REIT must distribute at least 90% of its taxable income to shareholders.

Pitfall No 3: Dividend Pay-out from Capital

Most investors do not read the fine print in the fact sheet before signing the agreement. Quite a number of mutual funds or unit trusts have the flexibility to pay dividend from capital when there is a need to. Such a dividend-paying practice is akin to you paying yourself dividend from your own bank account.

Nowadays, there are many advertisements promoting various investment products which give high dividends to generate passive income for your retirement planning. However, it is very important to pay attention to the above 3 dividend traps before you invest your hard-earned money. Ensure that you consider the above 3 factors, ask questions and get a satisfactory answer before signing any agreement. Alternatively, get a qualified and experienced investment advisor’s help in building your investment portfolio to minimise costly mistakes that may plague you later on.


Kenny Loh is a Senior Consultant at Financial Alliance, the largest Independent Financial Advisor in Singapore. He has won 4 Awards in 2017, Financial Alliance Quality Class Merit Award, Top 5 Investment Asset Under Advice (AUA) Award, Rookie Consultant of the Year Award and Best Practice Consultant Award. Visit his personal profile here:https://fa.com.sg/kennyloh/

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