Having recently been voted Investment Director of the Year at the Citywealth Future Leaders Awards 2023, Karen Lau answers some of the questions that are likely to be on many investors’ minds currently.
What’s the single most important piece of advice you can give to investors for the year ahead?
As we have seen in recent weeks, when the market turns, it can rebound quickly. I would advise to stay in quality companies with low debt and strong records of surviving difficult markets. It is worth noting that if an investor missed the 10 best performing days in the S&P 500 between 2003 and the end of 2022, they would have lost out on over 50% of returns during that time period.
How can investors best position their portfolios against higher-for-longer interest rates?
Quality defensive companies with progressive dividend policies would serve investors well where clients are being paid an income whilst allowing opportunities for growth.
Inflation remains well above central bank targets. How can investors take advantage of this?
With infrastructure/property investments dropping significantly following the mini-budget last year, it is worthwhile looking for holdings that will provide inflation-linked income. The business model for raising equity is less favorable in this economic environment; however, there are a few gems if you take a longer-term view.
How could geopolitical conflict affect investors in 2024?
Notwithstanding the human tragedies involved when war erupted in Europe and the Middle East recently, we should also bear in mind those that bubble in the background such as the Taiwan/China situation and the ongoing Chip War. It is likely that we will continue to see volatility in global markets and investors should hold their nerves and concentrate on quality companies and building a portfolio with a long-term view.
Which investment sector(s) or region(s) do you think will succeed in the year ahead?
The US remains the strongest contender to lead us out of the current economic climate. The healthcare sector has underperformed this year and I believe we may see a recovery as this is a solid long-term investment theme.
Please note that the value of securities may go down as well as up and you may not receive back all the money you invest. Past performance is not a reliable indicator of future results. Any views expressed are those of the author.