Tuesday, April 12, 2022
KBank Private Banking reveals its investment outlook for the second quarter. Even though there are still many crises All traces of damage from COVID Conflict between Russia and Ukraine But there is still an opportunity from the stock market that the price has dropped to a point that is worth collecting, along with 5 investment recommendations for long-term stable returns
Mr. Jirawat Supornpaiboon, Private Banking Group – Executive Chairman of KASIKORNBANK, said, “The current investment situation is highly challenging. Due to market conditions that have been volatile from various crises, whether it is the ‘damage from COVID’ that directly affects the industry This has caused product shortages and inflation all over the world. also born The ‘Chinese bond crisis’ is the result of political policies to organize the economy and society. resulting in severe liquidity shortages especially in real estate business And gems hurt the Chinese stock market, while ‘inflation’ also forced the Federal Reserve to raise interest rates. As a result, share prices around the world have dropped. Especially technology stocks and groups that benefit during the covids. moreover The world still has to keep an eye on the uncertainty from The ‘Russia-Ukrainian War’ that escalated until many countries brought sanctions on Russia. As a result, the price of oil continued to rise. and many fear that it may have a long-term impact on energy prices.”
Due to the dramatic and rapid succession of major events in the first quarter of 2022, the stock market fell faster than expected. Until some investors can’t adjust their investment portfolios. The question is, should this point be adjusted or not? And how to adjust it? KBank Private Banking presents 5 portfolio adjustments for long-term investors. to deal with the crises that occur around the world
1. Good fundamental stocks: Despite the strong fall in stock markets around the world at the beginning of the year. But when looking at the stock price, fundamentals are good in many groups. will find that the price has come down very low Compared to historical price and fundamental value And if the situation improves, the shares in the group of companies that have the ability to compete has a high market share Including high revenue growth and profits will adjust well. Because there are many people waiting to buy. However, if selling during this period to wait to buy a new one, but catch the wrong timing. They may miss taking profits during the market recovery and sink in losses.
2. Gradually buy stocks that are good and cheap: If investors have had the opportunity to sell and make profits before and holding some cash Should gradually buy good, cheap stocks that have a chance to recover quickly, such as stocks that win in the new economy where the price comes down But the performance was better than expected.
3. Shift your investment towards a group that will recover quickly: for a portfolio that has been fully invested. There is still another option to regain the port once more. By switching funds (Switching) towards business groups that tend to recover quickly when the situation improves This will help create a better long-term return than selling out and holding cash, for example, selling a fund with a lower price to buy a fund that has a lower price. focusing on groups with strong fundamentals and have a greater chance of recovery
4. Adjust ports to prepare for the economic cycle: when the situation eases Investors should start to adjust their portfolios to prepare for the upcoming economic cycles such as long-term high inflation and low economic growth. In this case, investors may choose to reduce their holdings in cyclical slow-growing stocks, such as Laggard & Cyclical, such as financial groups, or European stocks. Reduce your holdings of low-yield bonds and bonds, and prices drop if interest rates rise. and increase investments that benefit from inflation, such as commodities real estate fund or high-growth stocks, etc.
5. Choose Actively Managed Funds: In high volatility This is a good idea for long-term investors to choose funds that have an active portfolio manager. Because the fund manager will act as a front line for investors to adjust the portfolio of the funds they hold, such as adjusting the investment in fixed income funds. by reducing the maturity of bonds and debentures to reduce the impact of higher interest rates Adjusting stock funds by reducing investment in stocks directly affected by the crisis and adjusting the mixed fund by reducing risky assets to reduce the overall risk of the port, etc.
Mr. Jirawat said at the end that In times of economic turmoil, it can be an advantage for long-term investors to have fund managers to adjust their portfolios. However, it must be noted that long-term investing is holding an investment through all economic cycles. There will be periods of economic growth and slowdown. Holding a portfolio over the long term may go through critical periods and experience losses at times. But when compared to investments during the economic upturn that are already more The average return was still in line with the target. Along the way, you only need to adjust the port mix to suit the situation slightly. which is a normal investment
