Where to invest today according to experts
Where to invest today, with world markets so turbulent? The answer is not easy.
With stocks well below their 2023 highs, bonds down for the year, investors dependent on the Federal Reserve, two wars underway, it can be difficult to decide where to invest new money for safe gains.
Some experts and strategists have offered their assessments of Barron, giving guidance to investors undecided on where to invest money today.
Investments today: pay attention to these shares According to analyst Teresa Rivas there are some stocks not to be underestimated.
First, “I would take a walk down the Walmart aisle,” the expert said.
Here's the explanation for that trust in the company: At a time when the largest retailers continue to grow and technology increasingly influences shopping, Walmart continues to win.
It has turned the pandemic rebound into a permanent advantage and has attracted buyers even with higher incomes thanks to its subscription service and low prices at a time of high inflation.
Analyst Al Root is instead attracted by electric mobility, a sector that is undoubtedly in the foreground in this historical moment.
There are, however, some distinctions.
According to the expert, for example, Tesla is a solid company.
It has leading technology and a huge advantage over most of the competition.
However, the advice is not to invest in the stock now.
Barron's recommended Tesla in January, and the company has grown more than 100% since then.
Now, with shares at around $260, the wisest course for Al Root is to maintain his original position in the stock if he already owns it, or simply to have Tesla shares via an exchange-traded fund based on the S&P 500, where it makes up about 2% of the index.
In the same sector, he doesn't suggest piling into Rivian Automotive, "it's not making money yet." Eaton, Ford Motor, BMW (BMYY) and Albemarle are worth buying.
All four focus on the topics of electric vehicles and electrification.
Eaton makes many of the electric components needed to expand the grid as the number of electric vehicles on the roads grows.
The stock is near its 52-week high and is trading at about 21.7 times estimated earnings for 2024.
A little expensive, but things are good.
Albemarle is one of the world's largest miners of lithium, the key metal used in electric vehicle batteries.
Albemarle shares fell about 49% from their 52-week high, falling along with lithium prices.
But the latter, like other commodities, will eventually normalize, so the suggestion is to add stocks when things get bad.
Ford shares have fallen about 21% over the past three months, pressured by contentious labor negotiations with the United Auto Workers.
Hope Ford is an EV winner, even though the stock, at less than seven times estimated 2025 earnings, is priced not to win in EVs.
BMW has a wide range of electric vehicles.
It sold about 88,000 all-electric cars in the second quarter, accounting for 14% of total sales.
also read How to Invest in the Next 10 Years (With High Inflation) In Technology Bet on IBM Amid the 2023 mania for stocks on the generative artificial intelligence trend, investors have overlooked one that is arguably among the most compelling companies either on artificial intelligence than on cloud computing: the technology giant IBM.
Analyst Eric J.
Savitz recalls that the stock's catalyst was the 2020 decision to elevate Arvind Krishna to CEO, replacing Ginni Rometty, who retired from the top job after an eight-year run.
IBM shares have appreciated 53% with Krishna at the helm, but there should be more gains ahead.
When Krishna took over, he refocused IBM on two areas: hybrid cloud computing and artificial intelligence.
Krishna was talking about AI long before OpenAI launched ChatGPT in November, sparking the tech industry's current obsession.
And IBM's AI roots run deep.
Now, its AI efforts have doubled down, with a new platform introduced this year called WatsonX.
The new plan is to provide large language models and other AI tools to IBM's key vertical markets, such as financial services and manufacturing.
Additionally, IBM stock is dirt cheap at about 14 times estimated 2024 earnings and about twice expected sales, and has one of the highest dividend yields in the tech sector, at 4.7%.
The stock is nearly flat this year, significantly underperforming the broader market.
You don't need artificial intelligence to grasp the attractiveness of this sector – just old-fashioned investor intelligence.
How to Make Money with Bonds The case for having bonds in your portfolio seems compelling right now, as markets have absorbed the Federal Reserve's message that interest rates will remain higher for longer than investors had initially anticipated.
The analyst Elisabetta O'Brien reminds us of this.
Stocks plummeted in September when this reality was taken into account, and bond prices sank.
Yields, which move inversely to prices, have risen to levels not seen since 2007.
10-year Treasuries recently yielded 4.6%, down from its 16-year high of 4.
8%.
Bond yields may rise further, but with a ladder of maturities in your portfolio, you can hold bonds until they mature, meaning you can essentially ignore swings in underlying bond prices, expert advice.
If rates rise, you can benefit from higher yields as short-term bonds mature and reinvest the proceeds in new bonds.
There are many ways to structure a bond ladder, which can be constructed with Treasuries, corporate bonds, Treasury inflation-protected securities, or TIPS.
Today, many bond professionals view intermediate maturities as the sweet spot of the yield curve.
One way to structure a $100,000 bond ladder would be to invest $20,000 each in bonds maturing between three and seven years.