As the Russia-Ukraine war and inflation weigh on global markets, the S&P 500 index, Chinese tech stocks and agriculture funds could help investors to take advantage of a recovery
Investing is a long-term game, but it pays to take advantage of short-term opportunities.
Buying assets when they are out of favour and trading at low prices can really pay off, assuming they bounce back later.
So can spotting an opportunity before other investors do and jumping in before it takes off. Inevitably, both are risky. It is never easy to get your timing right.
We asked analysts to name three exciting ways to invest $10,000 over the next three months. The first was supposed to have crashed this year but is proving resilient, the second plummeted last year, costing investors trillions of dollars, but now looks a brighter prospect, while the final one could go either way.
Just remember that your aim should be to generate profits over years, rather than making a quick gain over a few months.
The US S&P 500
At the start of the year, investors were bearish on the US. They reckoned the S&P 500 index had done too well for too long. It is packed full of big-name technology stocks such as Apple, Amazon, Facebook, Tesla and Microsoft but that strength was suddenly looking like a weakness.
Technology valuations had become overstretched and resurgent inflation looked set to eat into the value of their future revenues.
The S&P 500 crashed by about 500 points at the start of this year to 4,326 on January 27, a drop of 10 per cent that sent it into correction territory.
It fell a further 150 points as Russia’s invasion of Ukraine spooked investors then, suddenly, the story changed, says David Jones, chief market strategist at Capital.com.
The Nasdaq 100 is now 8 per cent higher than the day Russia invaded Ukraine and Tesla is a remarkable 65 per cent higher
Paul Allison, head of equity research at Freetrade
Markets hate uncertainty but after such a poor start to the year, the war now looks to be priced into global indexes.
“If markets have discounted the current geopolitical situation, we may see a further recovery over the next three months,” Mr Jones says.
This is a common stock market reaction when war strikes. After the initial short-term response, things settle down as investors focus on the long term again.
The S&P 500 has rebounded to about 4,500. Mr Jones says investors should prepare for further volatility and believes there is investor support for the S&P 500 at these levels.
“It tried to break lower in late February and March but buyers stepped in.”
Research from Freetrade suggests that US technology stocks remain in favour among private investors despite higher volatility, with Tesla the most bought stock among its customers in March, followed by Apple, Facebook-revamp Meta and Amazon.
Big Tech remains the go-to sector for retail investors and this has paid off, says Freetrade’s head of equity research Paul Allison.
“The Nasdaq 100 is now 8 per cent higher than the day Russia invaded Ukraine and Tesla is a remarkable 65 per cent higher,” he says.
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