Displaying items by tag: returns

(New York)

ESG is a very notable area right now that has been gathering considerable assets. Client demand for such products is high in certain demographics. That said, some reports show that ESG stocks do not perform as well as their conventional peers. With that in mind, here are some of the best ESG stocks that looked primed to do well (and most of them won’t even be recognizable as ESG). The stocks are: Home Depot (HD), PayPal (PYPL), GlaxoSmithKiline (GSK), Equinor (EQNR), Churchill Capital Corp IV (CCIV), Microsoft (MSFT), Unilever (UL).

FINSUM: We love Home Depot here. The fundamentals look good –Millennials, which are the largest generation ever in the US, are entering prime home-buying years—and Home Depot is a leader in social responsibility, with diverse hiring practices.

(New York)

The best thing an investor can do right now is to ignore all the market predictions being released for 2020. Every research department has to put out a prediction, and most of them are not worth the paper they are written on. So what does one do? Invest in dividend stocks. It is an important but preciously little known fact that the lowly dividend has historically accounted for 45% of all stock market returns. They are also tangible and predictable in a way stock prices are not, giving them a crucial place in a portfolio.

FINSUM: An additional stimulus for dividend stocks is that the aging population is hungry for them since bond yields are so anemic. Check out AT&T at 5.3%.

(New York)

Despite all the worries that plagued the market this year, things have actually been very strong. Exceedingly so. But don’t expect that any longer, says Blackrock. The world’s largest asset manager expects returns in 2020 to come way down. The firm says that the big changes in monetary policy this year outweighed the geopolitical issues and caused huge returns, which won’t happen next year. Blackrock thinks returns in the mid single digits in 2020 seem realistic.

FINSUM: This is sort of a middle of the road call in terms of forecasted numbers, but we like the summary of what happened this year and how next year’s performance is not likely to be duplicated.

(New York)

Ray Dalio, one of the most famous hedge fund managers in the world, and the founder of the world’s largest hedge fund, Bridgewater, says that the world has lost its mind. The eccentric hedge fund founder recently published a blog post entitled “The World Has Gone Mad and the System Is Broken” in which he argues that zero rates, weak returns, and growing inequality are leading to something bad. What exactly that “bad” was remained unclear.

FINSUM: We agree that these are issues, but we are pretty tired of vague doom and gloom prognostications. We like a highly specific catalyst for such forecasts.

(New York)

If you follow Warren Buffett at all, you will know that one of his main investing philosophies is to buy companies with a wide moat, or a major defensive position in their industry which blocks competitors from grabbing market share. It seems second nature to want to invest in such stocks, however, research suggests they may not perform as well as one would think. The reason why is that wide-moat stocks are often very popular, which means they get overpriced as investors pile in. Because of this, companies that consumers love often have returns that lag lesser companies. “Great companies don’t always make great investments”, says the CIO of retirement for Morningstar Investment Management.

FINSUM: This is a really a matter of timing. At some point these popular companies see a big run up in their stock, so it is more a matter of buying them early than saying they underperform.