Five investment ideas for 2014
Rapid technological, political and social change will require investors to maintain a more active watch on their portfolios in 2014 in the chase for income, according to Prescott Securities.
“The global winds of change will result in the creation and destruction of industry sectors and businesses over the next 12 months,” Prescott Securities Senior Economist Alan Hutchinson said.
“There are too many emerging investment opportunities for sitting on your hands to be an option in 2014. More active portfolio oversight and management will be needed.
“In most of the major economies the threat of a fall back into recession has passed with the US and many European share markets at record highs. Several quality Australian stocks are also at historic highs although the overall national market is still well below the 2007 peaks.
“Smart stock selection is critical in the hunt for income and long-term wealth generation.”
Prescott Securities Ten Best Investment Ideas for 2014 are:
1. Embrace change
“Baby boomers are spending more on travel, housing, technology and healthcare at levels previously thought to be excessive for retirees. Investors need to be aware of potential investment opportunities aligned with these demographic shifts.”
2. The innovators
“Innovation separates the best companies from the rest of the field. Companies such as CSL pour significant resources into research and development. With the growth of the global middle class, their market is snowballing and innovation is their only competitive advantage.”
3. New political regime
“The election of a Liberal National Party Coalition means a more business friendly and less frenetic style of Government is likely. We also expect increased merger and acquisition activity, particularly in the agriculture sector as bids emerge from overseas. One way to tap into this is via managed funds that invest in the smaller companies most likely to be targeted.”
4. Tapping into China’s growing middle class
“As incomes in emerging markets improve, so does the demand for products such as wine and fine foods as well as services including travel, higher education and insurance. With the pick-up in overseas travel by Chinese nationals, Sydney Airport and Westfield Group stand to benefit.”
5. Investing offshore
“In recent years, Australian investors have been nervous about investing offshore. Given the relatively subdued national economic growth outlook, a higher offshore exposure through managed funds may be worth considering. This approach can provide access to high quality brands such as Apple, Google, Microsoft and Johnson and Johnson.”