The next 10 years will be different for investors than the past 20, according to investment advisers and asset managers. Charles Henry Montchaux, chief investment officer at Swiss private bank Syz, said investors risk making long-term decisions with “cognitive bias” Investors are urged not to extrapolate too much from recent history. In contrast to the past 20 years, inflation is likely to remain high for an extended period of time given the shortage of primary goods, companies reshoring production, and demographic shifts that leave key jobs understaffed. I think it’s highly sexual. Monchaux said this could increase volatility and reduce returns for assets that have performed well over the past decade. How to invest According to Monchaud, the best approach for long-term investors is to have a large portion of their portfolio in global stocks. Monchaud’s bank serves clients with assets of $1 million to $5 million. “If you have a long-term horizon, it’s best to invest in stocks,” he told CNBC Pro from Geneva. Additionally, to combat rising inflation, Monchaud proposed three options other than stocks and bonds. The first is to be more agile in allocating assets between stocks and cash. Second, add assets such as REITs (Real Estate Investment Trusts) and products that may be able to hedge against inflation. Third, allocate a portion of your portfolio to illiquid alternative investments. This may increase your returns over time at the cost of not being able to reduce your investment. Montchaux pointed to the European Long-Term Investment Fund (ELTIF) as a way to access the previously restricted private market, but investors need to be aware that they will not be able to withdraw their funds immediately. ELTIF allows retail investors to invest alongside institutions in assets such as infrastructure, private equity, and private credit. “There is a growing democratization of finance,” said Montchaux, who oversees investment strategy for the Swiss bank, which manages $15 billion in client assets. Earlier this year, Goldman Sachs raised more than $200 million for the first ELTIF for wealthy individuals. Other asset managers, including BlackRock and Franklin Templeton, have also launched ELTIFs for “high-net-worth European clients.” “This is not a way to get rich, it’s a way to stay rich,” said Montchaux, who suggested allocating up to 50% of your portfolio to some of these means. “So don’t expect 20%, 30%, 40%, 50%.” [recurring returns] “Investors should also invest in other assets, just as many investors invest in VC funds and early-stage growth ventures.” “These products are highly diversified; We’re looking for low-double-digit returns with low risk,” Montchaux added. Stocks and Bonds Jamie Cox, a financial planner at Harris Financial Group, expects international stocks to outperform U.S. stocks over the next decade as rising interest rates and inflation change market dynamics. In some ways, “this decade will be a lot like the decade of 2000,” he said, adding that there will be “a shift away from big U.S. tech stocks and toward more fundamental industries.” Cox, who provides investment advice for retirement income planning to more than 1,800 clients in and around Richmond, Virginia, expects interest rates to continue rising due to rising government debt and deficit levels. . , technology companies will face headwinds from tax changes and increased regulation. To that end, Cox suggested a global focus on high-dividend stocks in sectors such as consumer staples, communications and energy. “The ability to generate income is going to be a much better place to invest over the next 10 years,” he said. He cited consumer staples companies such as Unilever and Swiss-listed Nestlé as high-dividend companies. Companies and sectors he sees as promising over the next decade include communications infrastructure companies such as Crown Castle and American Tower, as well as energy and pharmaceuticals. But Cox told CNBC Pro that investors shouldn’t “paint the technology sector too broadly.” “There are a lot of stocks that are tech stocks, like Broadcom, for example, but they’re also high-dividend stocks,” the investment manager noted. For younger investors who have been retired for more than 10 years, Cox recommends a 100% stock portfolio that maximizes returns with low-cost index ETFs. Cox suggested investors invest in actively managed funds only if they are looking for dividend income in retirement. “You need to spend money to generate sustainable income, otherwise you end up with less capital,” Cox says. “So it’s worth paying for active management, and it’s worth paying for mutual funds to spread the risk of loss at that point, but not until then.”
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