It's the kind of problem that's fun to have: you come into a financial windfall—an overdue bonus at work or a handsome inheritance from a long-lost relative—and you just don't know what to do with it. You can get decent yields on a money market or savings account these days, sure, but if you're looking for real returns, you'll want a savvier play.
Lucky for you, three leading wealth advisors just shared their top ideas with Bloomberg. Here's what they said and how you can put their ideas to work.
Idea #1: US Tech, Japan, Greece, Gold, and Oil
Despite the current market jitters, TwinFocus co-founder Paul Karger is sticking with big-cap US growth stocks. These are the household names like Apple, Microsoft, and Nvidia that have powered much of the market's recent gains. But Karger isn't putting all his eggs in one basket. He also sees opportunity in Japan and Greece—two markets that have been quietly outperforming.
Japan's stock market has been on a tear thanks to corporate governance reforms and a weak yen that helps exporters. Greece, meanwhile, has bounced back from its debt crisis and is attracting investors looking for value. Karger also recommends throwing some real assets—oil and gold—into the mix to take advantage of the current backdrop, while adding a little diversification. Gold is often seen as a hedge against inflation and geopolitical turmoil, while oil prices have been volatile amid Middle East tensions.
Idea #2: A Stock-Picker's Market
Crossmark Global's Victoria Fernandez says it's a stock-picker's market, meaning broad market indexes may not tell the whole story. She's prioritizing factors like profitability, free cash flow, and earnings yield. In plain English: she's looking for companies that are actually making money, generating cash, and offering a decent return relative to their stock price.
This approach is especially relevant when interest rates are high and the economy is uncertain. Companies with strong fundamentals are better positioned to weather a slowdown, while weaker firms may struggle. For everyday investors, this means doing your homework on individual stocks rather than just buying an index fund—or using a professional manager who can do the picking for you.
Idea #3: Momentum in Industrials, Materials, Banks, and Healthcare
Miller Tabak's Matt Maley, meanwhile, is a fan of momentum strategies. That means buying stocks that have been rising and selling those that have been falling. He likes the industrials and materials sectors, as well as bank stocks and healthcare.
Industrials and materials tend to benefit from a strong economy and infrastructure spending. Bank stocks often rise when interest rates are high because they can charge more for loans. Healthcare is considered a defensive sector—people need medicine and medical services regardless of the economic cycle. Momentum investing can be risky, though, because trends can reverse quickly. Maley's approach works best for investors who are willing to monitor their positions closely.
What It Means for Investors
So, what should you do if $100K lands in your lap? The experts' advice boils down to a few key principles:
- Diversify across geographies and asset classes. Don't just buy US stocks. Consider Japan, Greece, gold, and oil.
- Focus on quality. In a stock-picker's market, look for companies with strong profitability, free cash flow, and earnings yield.
- Consider momentum. If you're comfortable with active trading, sectors like industrials, materials, banks, and healthcare may offer opportunities.
Of course, no single strategy fits everyone. Your own risk tolerance, time horizon, and financial goals should guide your decisions. And if you're unsure, a fee-only financial advisor can help you build a personalized plan.
For more context on how global events are shaping markets, check out our coverage of US stocks rising as oil dips despite US strikes on Iranian targets and stocks holding steady amid US-Iran strikes and Fed split.
