How to invest during a crisis and when the markets are even more irrational than usual? Here are three takeaways from a recent investor conference.
Two weeks ago I attended the Money Show in Orlando (Florida) which was held from October 30th to November 1st at the Omni Orlando Resort at Champions Gate.
The conference kicked off with several high profile personalities sharing their research on today’s market and their views on the global economy.
A number of speakers highlighted some stocks that might perform well towards the end of the year.
Today I would like to share with you some points that particularly caught my attention at this conference.
And I would also like to invite you to follow me on Twitter.
I chose my seat, at the Money Show in Orlando which is starting right now. I look forward to hearing from some of the brightest minds in the market to tell us what they think regarding the stock market and the economy.
If you’re at the conference, come say hello.
(I also use my Twitter account to share investment ideas throughout the week, so it’s a great way to follow my positions.)
But let’s get to these three takeaways from The Money Show.
Point n°1: The biggest geopolitical risk factor
The American energy crisis is one of the important topics addressed by almost all speakers.
In particular, green energy efforts (or more accurately, America’s mismanagement of green energy projects) have set us on a perilous path.
Phil Flynn of Price Futures Group even says that this war on America’s energy sustainability is the biggest geopolitical risk factor stalking investors right now.
The flip side is this: we just aren’t producing enough oil, we aren’t refining enough gasoline and diesel, and we aren’t creating the infrastructure necessary to keep the US economy moving forward.
This is bad news and frustrating for consumers like you and me.
But the good news is that companies that produce oil, refine it, and operate infrastructure such as pipelines, will do just fine.
And the investments we’ve made in these profitable energy players will continue to pay dividends for years to come.
So if you own the shares of the many companies in this sector that we have talked regarding, you can congratulate yourself! These investments are in excellent shape!
Point 2: Inflation is not going away
The second point I keep hearing is that inflation will be a big problem for some time.
Just last week I explained to my American readers why, a once inflation crosses 8%, it tends to stay high for years. So don’t expect the Fed to take up this challenge anytime soon.
Labor costs are one of the main drivers of inflation. And David Kotok of Cumberland Advisors has some chilling statistics regarding it.
Due to the pandemic, we have experienced two consecutive years of declining life expectancy in the United States. In addition to the tragic human toll left by the Covid crisis, there is now a labor shortage. And it got worse with the decline in labor force participation and immigration.
In short, there simply aren’t enough workers, and companies are competing for recruits. This leads to higher wages, operating costs and, ultimately, prices.
This trend will not be reversed on the pretext that the Fed raises interest rates.
With inflation continuing to pose challenges, we will focus on generating income to cover rising expenses and reinvesting that money in trading opportunities at attractive prices.
Point n°3: The period is ideal, for an investor
Although many of the topics covered by Money Show speakers cast a chill, there was a lot of optimism, too, at this conference.
Indeed, the bear market has caused stock prices to plummet in all sorts of market sectors. And while some stocks are worth falling, others belong to companies that remain healthy.
Today you can buy shares of quality companies, which generate reliable profits, and therefore prices are discounted. Then, over the months – and probably years – to come, those stocks will appreciate.
Most of them will also pay you attractive dividends that will help you cover your income needs throughout your retirement.
And, if you don’t need the income right now, you can use that extra cash to buy more cheaply priced stocks.
Here are some of the companies recommended at the conference:
- Apple (AAPL)one of the few large-cap tech stocks that hasn’t been hit hard this earnings season.
- Exxon Mobile (XOM)and pure player the energy sector, which should benefit from global demand for oil and natural gas.
- Barrick Gold (GOLD)as high inflation should drive gold prices higher, especially once the dollar retreats.
And above all, you can stay informed by following me on Twitter to access the latest updates.
A lot is happening for investors, so stay tuned!
