Smart Investment Strategies for 2016

The financial markets were very choppy in 2015. Prices went up and down like a yo-yo, so it was hard to stay abreast of what was happening on a day-to-day basis. The price of oil dropped like a stone, but stocks hit a record high in May, only to tank in August following reports of an economic slowdown. Bonds dropped, as did commodities, yet gold rose.

The experts at investment firms such as Fisher Investments UK, are divided as to what the future holds for anyone looking to invest in the markets in 2016. These firms can’t predict the future, but here are a few interesting perspectives on which investments are worth looking at in 2016.

Energy Stocks

Energy stocks have been beaten into submission by the collapse of global oil prices. This makes then an attractive investment option for investors. Experts predict that oil prices will soon start to recover as the global economy recovers from the recent downturn. If investors get in at ground level now, there is good potential for growth in 2016.

MLPs

Master Limited Partnerships (MLPs) trade like stocks and are mostly comprised of companies that deal in oil and gas storage and transportation. Some experts think MLPs are a good buy in 2016, as they are very cheap right now, but giving good yields. Interest in natural gas is still high and oil prices are likely to rise in the coming months, so investors who take advantage of MLPs now could enjoy excellent returns. There are also tax advantages to investing in MLPs.

CEFs

Closed-end funds (CEFs) are mutual funds that are traded like stocks. Many closed-end funds are selling at a discount right now, so they are attractive to investors. However, experts warn that in order to select the right CEF for your portfolio, you need to check to make sure the fund has a consistent performance record and that the people who were responsible for a great performance have not left in the interim.

Biotech Stocks

If you are looking for short-term gain, don’t invest in Biotech stocks say the experts. The reason for this is simple. Pharmaceutical companies are under fire from politicians for charging extortionate prices for drugs, so with a U.S. presidential election just around the corner, many big name pharmaceutical brands could take a hit. If the pharmaceutical industry declines, biotech stocks will tumble.

In the long term, biotech stocks could be a smart buy, but the expert advice is to stick to larger companies and don’t buy until after the U.S. presidential election has run its course.

Gold

Gold is traditionally seen as a safe haven for investors, for gold is not subject to the same ups and downs as the stock market. Many experts advise that investors don’t pour everything they own into gold, but diversifying a small percentage of your portfolio into gold provides some protection against inflation.
Investing is never without risk, so always take advice before making an investment and don’t invest what you can’t afford to lose.