Wes Moss, the executive Vice President/Chief Investment Strategist of Capital Investment Advisors (CIA) in Atlanta. Wes works directly with clients providing investment strategy and guidance to help them meet their financial objectives, and will be joining us for our How To Invest in 2010 event March 27. Wes talked about a column he wrote for the New York Daily News on 10 tips for creating an efficient money strategy in the new year, and shared more insight with us today on investing in 2010.
Q: The first point in your article is “don’t give up on stocks.” What advice do you have for people who have money in stocks?
A: Part of what I’ve talked about is that we’ve lived through a difficult period of time in equities, and the decade of the 2000s is the worst decade that we’ve lived through since the 1820s. It’s very frustrating. We’ve had very difficult periods of time where the S&P 500 has been taken back to same levels it was at in 1998. My message to investors is that profits for S&P profits were about $45 for overall earnings, current estimates for S&P will be about $75. The market’s at the same level back in 1998 but profits are up by nearly 60 percent. Don’t give up on stocks, because companies are actually relatively healthy.
Q: What should investors consider when looking at the possibility of investing in the global market?
A: Countries like Brazil and China have growth rates double or triple the U.S. on the margin. If that continues, that’s a good place to invest. I encourage people to cautious in these investments. Within your 401(k) plan most have an emerging market fund option and I think it’s tempting to put a lot of money into that. Some returns have made well over 100 percent returns, but you still don’t want to have 50 percent of your portfolio in those risks. A more conservative option would be to look at larger cap, multi-national companies that do business all over the world.
Wes also talked about the top mistakes he sees investors make: that many investors are overly concerned about always searching for the new “hot” investment, are always hoping to perfectly time the market, and don’t place enough emphasis on maximizing income production from current investments. One of his biggest recommendations he has for investors to create an “all-weather” asset allocation strategy that divides a person’s assets into the percentage of stocks, bonds and cash that a person can live with no matter how the market fluctuates.