The New Year will see many investors vowing to make the most of their finances. Unfortunately, those hoping for advice from their bank or building society may be in for a nasty surprise – as of January 1st, new rules from the Financial Services Authority mean that many providers will be withdrawing their face-to-face advisory services. With this in mind, here are the top tips for those independent investors who’ll be going it alone in 2013.
Table of Contents
Real Estate
Investing in something tangible is always an attractive prospect, but the thought of buying property at home will turn the stomachs of many. The International Real Estate Investments Magazine recently ranked Costa Rica as the ‘Best Country for Real Estate Investing in 2013.’
Its decision lay in the fact that the country is incredibly stable and has no (real estate) capital gains tax. Other suggestions for real estate investment include Indonesia, Moldova, Jordan and Jamaica.
Energy
As the world’s population grows, so does the requirement for energy. While oil, coal and natural gas have traditionally been the main sources, many are now looking to the alternative or renewable energy markets
Some of the companies that look set to prosper in 2013 include Cal Dive International, Inc., a marine contracting company; Vanguard Natural Resources LLC; Delta Natural Gas Company Inc.; Energy Transfer Equity L.P.; and Western Gas Partners LP.
Countries
David Herro, the Portfolio Manager at Harris Associates LP, suggests that although Japan has been underperforming as a global equity market, this will change in 2013. Chile is also a good bet – the country stands better than the US in several international business surveys. European and Middle Eastern economies are expected to grow after a tumultuous 2012.
Technology
While in many ways the technology bubble has burst, that doesn’t mean to say that the companies involved aren’t still performing well, because they are. Tech-inclined investors can make the most of developments by using risk assessment software such as that available from https://www.sungard.com/APT.
Equities
The annual survey of the CFA Institute’s members revealed that 22% of its 100,000 members believed equities would be 2013’s best-performing asset class. “We’ve had a good year in equities,” says Matt Orsagh, director of capital-markets policy with the institute, “so it’s not surprising to find that”. For those who prefer to hedge their bets, it’s worth gauging the level of multi asset class risk before investing.
Precious Metals
Always a high-performing asset class, precious metals look set to continue offering investors a good yield in 2013. The Citigroup bank expects gold to gain – until 2014, when its price will fall. Platinum is also expected to climb fast, and will overtake gold by 2014. Palladium is expected to out-do both gold and platinum.
Eurozone Debt
With a solution to the European debt crisis looking ever closer, Andreas Utermann of Allianz Global Investors suggests that now is the time to cautiously buy Eurozone debt. “Tail risks have clearly diminished,” he says. “We are gradually warming up to non-German Eurozone sovereign bonds.”
Another option is to buy European corporate debt. According to Doug Ramsey of Leuthold Weeden Capital Management, “The high-quality European multinationals are among the last high-yielding global equities that haven’t already been bid up aggressively by income-seeking investors.”
About Carson Derrow
I own most of the sectors you have highlighted by owning Vanguard’s Total US Stock Market, Total International Stock Market, and Total Bond Market. When I look at the Callan periodic table of investment returns I doubt that anyone can correctly identify market sectors that will outperform year-over-year. I thus go for diversification across most all sectors. (I do not currently own any foreign bonds, although I may decide to in the future.)