“With mounting geo-political tension and an unresolved trade war, two relatively stable sectors to overweight for 2020 are utilities and especially real estate. “While potential opportunity for growth in 2020 abounds, it’s also a good idea to maintain a hedge strategy in light of equally growing market uncertainty,” advises Montenegro. Rule number two – remember rule number one.
If you want to invest in real estate, but don’t want to put up your life savings or get your hands dirty, one of the best ways is to invest through real estate investment trusts.Īnthony Montenegro, founder of The Blackmont Group, cites Warren Buffet’s famous two rules to investing: Rule number one – don’t lose money. What’s more, buying individual properties is capital-intensive, and can leave you open to tenants not paying rent, and months of missed income between rentals. But owning properties can be as much of an occupation as it is an investment. Real estate has proven to be one of the best investments of all time, with returns comparable to the S&P 500 over the long term. Clean energy may turn out to one of the big plays for the entire decade. For the 12 months ending November 30, 2019, the fund had a return of 25.41%. A fund specializing in that subsector is iShares Global Clean Energy ETF (ICLN). That might make now an excellent time to get on board with clean energy. Though the fund returned less than 10% in 2019, it could be an excellent way to play energy volatility.Īlso in the energy sector, it’s undeniable that climate change is fast becoming a hot political issue. One way to play energy is through the Vanguard Energy ETF (VDE). Any significant disruption in oil flowing from that region can cause energy to spike across-the-board. Not only has the sector underperformed the general market for the past several years, but the geopolitical situation in the oil-rich Middle East seems to be heating up, particularly between the US and Iran. If you have an appetite for risk, the energy sector may be worth a good look.
We suspect, given the current muted world economy, that S&P 500 earnings growth is likely to disappoint next year, whereas Health Care earnings should be steady.” “The total S&P 500’s 2020 earnings growth estimate is +9% and it trades at a 17x price-earnings multiple. “Although the S&P 500 Health Care sector has estimated 2020 earnings growth of +12%, it trades at a discount to its growth rate at a 17x price-earnings multiple,” notes Forbes contributor, Randy Watts. It may represent an opportunity to continue generating double-digit returns even in a less cooperative market. Though the healthcare field in general trailed the S&P 500 in 2019, the SPDR S&P Biotech ETF (XBI) turned in a one-year return of close to 30%. Healthcare tends to be a durable sector, even when the general market is misbehaving.
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