Experts are recommending three areas for investments this year: mutual funds, asset managers, and social media. Each comes with its own benefits and returns.
Compared to the tech bust of the 1990s, technology companies are flourishing in 2017. According to investment banker Thom Weisel, this is because “these companies, in most cases, are enormously profitable out of the gate.” Their business models are also far more solid, Weisel continues. For one thing, the startup costs for social media technology are minimal—while the potential for earnings is expansive.
“For the most part, these are real companies with real revenue and are generating real cash flow,” he says.
The strong stock market has led to a boom for investment banks and asset managers, meaning now is a great time to invest in these companies. In particular, they stand to gain if and when interest rates rise.
Some examples of company investments recommended by experts in the field include:
- Goldman Sachs. Though it got a bad rap during the financial crisis of 2008, Goldman Sachs is now considered a “best-in-class franchise” with great positioning in many different business lines. Revenue for the last quarter was $7.88 billion (0.34 billion more than was forecast).
- Oaktree Capital Group. As an investment management firm focusing on alternative strategies, Oaktree’s main promise is its unusual approach to its products as well as its 20% stake in DoubleLine Capital, which has over $100 billion in assets.
- Ameriprise Financial. With more than $800 billion in assets, this company’s competitive advantage is its brand recognition and strong performance. Because of its prestige, Ameriprise gets a lot of wealthy patrons, which are likely to increase the company’s performance and reputation.
- Stifel Financial. With a long history as a growth investment banker, Stifel also boasts a full-service brokerage (Stifel Nicolaus) and a growth-focused investment banker (Thomas Weisel Partners, another brainchild of the aforementioned Thom Weisel).
Finally, experts are recommending mutual funds as solid investments in 2017. In particular Driehaus Emerging Markets Small Cap Growth Fund (DRESX) and Ridgeworth Seix Floating High Income Fund (SAMBX) were noted in a recent Forbes article as being a good place to start. DRESX boasts $319 million in assets, and small-cap EM companies are exhibiting some of the best growth aspects this year in global equity markets. Meanwhile SAMBX offers floating-rate bond funds, which are likely to help bond investors ride out any downturn in the future bond market. In fact, floating-rate funds like SAMBX can actually increase in value when interest rates rise.
While the investment world is, by its nature, uncertain, experts agree there are a variety of options when it comes to making smart choices this year and into the next.