If you’re looking for more Investing Tips for 2013 we have a few of them here for you today so, without further ado, let’s get started. 

If you’re looking at mega-caps be very selective.  Many appear to be ‘cheap’ and even tempting but the majority come with some serious strategic challenges and will continue to languish as they did last year.  Small and mid-sized cap equities should perform well however. In the cyclical sector you should look at quality growth stocks, recovery stocks and mid-cap stocks.

If you’re expecting a recovery in the West it would be a good idea not to bank on it too heavily.  Experts expect growth to be between 2 and 2.5% this year at best, especially due to the fact that the US is being held back by declining North Sea output, a secular decline in many types of financial services and an over dependence for European exports. Non-Euro countries should see reasonable growth this year however even as Euro countries spiral out of control and peripheral European countries struggle.  Even though growth is slow in developed markets however they should still see increases in corporate profits.

If you’re keen on investing in resource equities you may be onto a good idea.  The companies that have raised their output, secured excellent terms on new resources and avoided excessive acquisitions are the ones that will be returning cash back to their investors in the form of buy-backs and dividends.  One of the newest keys to investing in this sector has been stockpiling.

Emerging markets will hold some opportunities this year as they recover from the last 2 years of underperforming.  Indeed they are undervalued in relation to global equities on a PE ratio discount of 14% when both have comparable earnings growth.  The majority of these are relatively expensive, to be sure, but on a long term basis really do look very appealing financially.  The fact still remains however that emerging markets are one of the few bright spots in the bond market globally and they offer gaining currencies and falling yields.

A number of other Tips that we believe you should keep in mind are;

  • Equity market growth will be modest in 2013. Don’t expect highs or lows.
  • Inflation is still going to be a problem and will stay around 2%.
  • Gold will most likely rise due to the failure of positive real interest rates to return.
  • Conventional bonds will be outperformed by inflation-indexed bonds in 2013.
  • Avoid government bonds in developed markets.
  • A bull market will more than likely not return in 2013 but rather in 2014.
  • Invest long-term rather than short.

Quick and easy to digest, yes?  We hope that these Tips have been helpful and we invite you back soon for more of the same.

Filed under: Investing

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