Experts say stocks, mutual funds good long-term play
The summer of 2015's Bull Run still has some kick and experts say that means equities offer growth potential in key sectors.
So where should you invest now?
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Manny Schiffres the executive editor for Kiplinger Magazine says that really depends on your time line and risk tolerance.
"If you are saving to buy a home," he says, " that would be considered a short time horizon and you should put your cash in a CD."
If you have a long time horizon and a reasonable tolerance for risk, Schiffres recommends stocks preferably in a mutual fund portfolio.
"For the novice, he says, " there's no reason why you shouldn't invest in an index fund , that's a low cost mutual fund or exchange traded fund that is designed to track the market."
Schiffres says it's all about the bang for the buck.
Historically stocks have delivered a 10 percent return for long term investors while today's savings accounts will yield 1 percent or less.
"No legitimate advisor thinks stocks are going to deliver yields of 10 percent over the next 10 or 20 years," He says, but you're still going to see a 4 percent to 6 percent real return, that is an after inflation return, of that amount in the stock market."
Nancy Hecht of the Certified Financial Group in Longwood agrees.
Hecht likes three sectors in the stock market: Consumer staples, Health Care and Construction.
She recommends : Fidelity Select Construction and HSG Port,Fidelity Advisor HealthCare T (USD), Janus Global Life Sciences A (USD) and Guggenheim S&P 500 Eq Wt Cons Stapl. ETF (USD).
Hecht advises all her clients to be disciplined and tells them never to take the "all in" approach.
"Never invest all your money at one time and if you're doing it yourself as opposed to having someone like myself helping you than buy on the dips, in other words buy low and sell high," she said.
Kipplinger's Schiffres says if you are looking for even bigger gains you might consider putting money in international stocks "particularly emerging markets."
"They're riskier but that's where the growth is," he says.
Specific stocks with a global edge to consider: General Electric, Coca Cola and surprisingly McDonalds.
The magazine likes the fast food giant because "it has so many operations overseas."
And finally for those willing to take on extra risk he recommends the biotech industry.
"It's been on a tremendous run but so have the advances in science."
Nancy Hecht can be reached at :Nancy@financialgroup.com
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