With the world still reeling after the Global Financial Crisis and a large number of economies experiencing sluggish growth levels, it is understandable that many investors have only modest goals for 2011. With the right information and by sticking to investment strategies that have a proven track record, the average investor should be able to achieve worthwhile gains. Although the bottom lines of many nations’ Governments may seem debt ridden and unsustainable, thus adding to the overall gloomy forecasts of the world financial markets, it is prudent to remember that many companies, especially those with a global focus, are turning a healthy profit and continue to expand in value. The savvy investor in 2011 will take notice of the companies that are managing to thrive in these uncertain economic times and invest money accordingly where the biggest profits are most likely to be reaped. It may require that an investor broaden their focus and open up their portfolio to a greater cross-section of global businesses and brands; expanding an investment strategy that veers away from an exclusive local focus may indeed be the key to success to investing in 2011. Specific investment areas to focus on include:
Gold, silver, copper and oil are all trading at high prices and seem to be set to expand with this trend. The 33% increase for copper in 2010 sees it trading at an all-time high and silver and gold are not far off their record bests. One point to keep in mind is that commodities can decrease in value markedly in a relatively short space of time so it never pays to be too arrogant when throwing money at them. The staggering investment in mining interests over the past few years should continue to yield high gains where commodities are concerned yet it is wise advice to remember that every bubble usually bursts at some point so a close eye should be kept on the markets to ensure that any price fluctuations are keenly observed. Other commodities such as coal, wheat and sugar are increasing in price and could yield a healthy payout for smart investors.
– Stock Market:
Even though there is always a lot of talk about busts and booms where the stock market is concerned, many smart investors seem to be able to stay ahead of the pack and turn a profit regardless if the market is in bull or bear mode. Arguably the world’s greatest investor, Warren Buffet, recommends that people put their money in to blue chip stocks and hold on to their investments for the long term. Another strategy that is making money for investors it to channel money in to companies known as the Dogs of the Dow; these are the stocks that have paid the highest dividend yields over the past 12 month period on the stock exchange. The stocks are sold at the end of the following year and profits are invested in to the ten companies that have had the highest dividends for that year – and so the cycle continues. An analysis of market trends have shown that the Dogs of the Dow investment strategy has continued to perform well for investors for many years now and should continue throughout 2011. An important focus is to target the 10 blue chip stocks – out of 30 – that returned the highest yields; this is seen as being a smart investment as these companies are the ones that are not favoured by the Wall Street markets and as a result are seen as good bargain investments. Companies such as AT&T, Pfizer, Kraft and Verizon are already being touted as front runners in 2011 for those who favour the DOTD investing strategy.
– Real Estate:
A number of real estate markets are experiencing flat returns and property prices are falling in many parts of the world as people hold on to their money. Stories of investors buying large portfolios in the U.S. market especially are emerging – with real estate being at rock bottom prices in some areas, the theory is that savvy investors should be able to make large profits once the market improves and real estate prices begin to climb again. Although real estate is traditionally seen to be a smart choice for profitable investors, it still pays to be up-to-date with the property market and to be well informed of regional price fluctuations and market trends.