Market volatility, inflation hitting new highs and the risk of recession are making things difficult for investors right now. “Over the next 10 years, the forces that led to the rapid outperformance of growth versus value are unlikely to repeat themselves,” Paul Danis, head of asset allocation at Brewin, told CNBC. Dolphin. “Bond yields have hit a structural low and relative valuations remain high. Regulators have become more focused on reining in the already very dominant mega-cap platform companies.” But there are pockets of opportunity, according to a number of market experts, particularly when it comes to investing for the longer term. Here, CNBC PRO asks them where to invest with a ten-year timeline. Where to invest For Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, a 10-year investment horizon can allow investors to take on more risk. “One option is to invest in funds focused on small companies in emerging markets, for example, where there might be greater growth potential,” she told CNBC via email. However, she stressed the importance of diversification in terms of sectors and geographies, as well as taking into account potential political volatility and regulation in emerging markets. Vincent Mortier, group chief investment officer at asset manager Amundi, also said emerging markets could look attractive on this timeline. He noted that uncertainty regarding equities “remains elevated” and as such recommended considering different assets in which to invest. “We maintain our positive view on emerging markets. [emerging market] hard currency bonds due to their attractive valuations and exposure to commodity exporters,” he told CNBC via email. on the US dollar against the euro.” Amundi – Europe’s largest asset manager, with $2.247 trillion under management – favors the US over Europe and remains neutral on vis-à-vis emerging markets, Mortier said, adding that investors could also look to “real assets” (or physical assets, such as real estate and commodities) as a way to fight inflation. Hargreaves Lansdown’s Streeter flagged ESG (or environmental, social and governance factors) as another consideration to ensure long-term growth in a responsible way,” she said. She cited the company British health care firm Smith & Nephew as one such example, which it says will benefit as hospitals catch up on operations delayed due to the pandemic. “In particular, there should be significant potential for the group’s sports medicine and orthopedics businesses,” she said. Big Tech Despite massive volatility in tech in recent months, big U.S. names are more likely to be able to weather longer-term inflation, according to Streeter, who picked Microsoft, Apple, Amazon and Alphabet. “It’s partly because they have the resilience of big piles of money to fall back on, but also because of the power of attraction of their brand and the fact that their technology seeps into all aspects of our daily lives,” she told CNBC via email. Microsoft “makes software the world can’t live without,” Streeter added, and she also loves her gaming revenue as well as her cloud business. Read more ‘We see a clear role for alternatives’: Pros give advice on how to trade volatile market Goldman says buy these global stocks to play $900bn EV opportunity – names one with 50% of rising Tech the new stocks of value? Here are the 10 cheapest names in the tech space However, Amundi’s Mortier issued a warning on Big Tech, noting that the performance of the five biggest companies has declined. “We believe this trend will continue in the years to come as the growth of the biggest companies matures, regulation increases and investors look elsewhere for returns,” he told CNBC via e-mail. -mail. The tech-heavy Nasdaq is down about 28% year-to-date. Contrary opinions When asked if he had any contrary opinions on where to invest, particularly over a 10-year period, Danis said the Chinese market is the one that Brewin Dolphin believes will provide “relatively important in the long run”. While the Chinese government has cracked down on tech giants, for example, by introducing anti-monopoly guidelines and focusing on “common prosperity”, Danis said this is “now fully reflected in valuations”. “The dominant market emotion towards China right now is fear. As Warren Buffett says, you want to be greedy when others are scared. will remain an extremely innovative and entrepreneurial place. Productivity growth is expected to remain relatively strong,” Danis added. What to ask your financial adviser “The question to ask an investment adviser is whether your investments are still a good fit for your situation, whether your financial work or retirement situation has changed, or whether you have a new goal for your investments” , said Streeter. Investors should also consider their attitude to risk and determine whether their portfolio needs to be adjusted accordingly. “Rather than looking at short-term performance of particular investments, it is important to look over a longer time horizon, ideally at least 5 years, rather than getting caught up in short-term performance twists and turns. Investors should also ask themselves what the relative costs are of their investments,” she added.
