From the Bunker: Welcome to the first COVID financial year
- Stock market indices are inherently overweighted towards specific sectors
- Active investing may present many opportunities this year so long as you have the best resources
- A combined approach of active and passive investing may work well for the long term
This week on From the Bunker Evan Lucas and I were joined by Nathan Bell from Intelligent Investor to go through the challenges we are likely to face this new financial year. The problems are many with the COIVD crisis likely to dominate leaving billionaire hedge fund manager Ray Dalio to refer this period as a ‘lost decade’ coming for stock investors.
We covered the various market indices and their overweighting to specific sectors that may present a risk going forward. In particular, the US S&P 500 with technology stocks and the Australian S&P 200 comprising mostly of banks and miners. Nathan discussed several shares that he has his eye on and how ‘active’ investing, such as the Intelligent Investor portfolios and stock recommendations, may shine this financial year.
Evan spoke about how the Australian dollar may fair this year and how knowing more about CEOs and founders of companies give you insight into potential opportunities. Alan Kohler is uniquely placed to quiz CEOs, founders, and portfolio managers as seen on Eureka Report.
I was able to shed some light on dollar-cost averaging and the passive investment approach that has favoured investors over the past number of years.
Ultimately, we all agreed that an investment strategy that combined a mixture of a passive and active approach was one that should be given consideration. To that end, you can discover more about InvestSMARTs range of diversified capped fee portfolios here.
To sum up, while it is going to be an interesting financial year for markets, we are quietly optimistic that with the right approach, it is one that can be successfully navigated.
You can watch the recorded webinar below: