Investing in 2018. Part Two – Where could we see value?

We’ve put together a two-part guide to investing in 2018. Part One compared the performance of global markets. In this, the second part, we look at how the experts view the potential for growing your wealth in the coming year.

Many experts agree that the global economy is recovering, and the consensus of the FT’s panel of investment experts seems to be “more of the same”.  Many of the global markets doing well in the first quarter of the year could continue to perform for the next three.  But remember, spreading your portfolio across various markets and various sectors – or diversifying – to spread the risk is a key principle of successful investment. 

Going global and taking advantage of economies that are leading the recovery is only part of the story. We’ve looked at what the experts are saying about some of the individual sectors.

Technology leads the way

Most observers agree technology stocks are still on the up. Facebook, Apple, Netflix and Google are doing well because they are very profitable businesses.

But some sound a note of caution; how long will those returns last? Can a company continue to generate double-digit returns, or will someother disruptive technology come along?

Oil and Gas recovering

The boost in the global economy has inevitably meant increased demand for oil. Real oil price recovery, driven by production restraint among members of oil cartel OPEC and geopolitical concerns in the Middle East, has put the oil & gas sector back on an even footing.  Oil company share might be worth considering for your portfolio again.

The companies supporting the sector, with specialist engineering and services such as geological surveys should also be looking forward to new orders.

Banks might be worth considering

It’s been ten years since the banking crisis brought us all to the edge. Now, the banks themselves finally look to be recovering in line with the economy in general.

Government support has been wound down, and the big three, Lloyds and RBS and Barclays, have wound down their ‘bad’ bank operations and passed the Bank of England’s latest round of stress tests. With pared down branch networks and new online services, they may be starting to look profitable again. Rising interest rates could also help support their profitability.

Property – as safe as houses?

A shortage of homes might make investing in property worthwhile. The government’s pledge to address this shortage with 300,000 new homes a year might provide a simpler way to share in the growth of the sector, by investing in housebuilders who are likely to swell their profits as a result.

What should you do?

The opinions listed here are simply the general view of financial industry observers. Before making any investment decision you should seek expert advice. You need to know the details about the potential of various market sectors and whether they match your own appetite for risk.

For the help you need about investing in 2018, please contact us at Continuum, where we will be happy to help.

The value of investments can fall as well as rise and you may get back less than you invested.