Investing advice: How are you advising clients to invest in 2013?
Florida wealth managers give advice in this special report.
Eli Butnaru’s investment strategy this year is to be cautious. “The main thing we’re doing for our clients is looking at ‘how do we protect capital,’ ‘how do we not lose money.’ ” For that reason, he is wary of investing in small U.S. companies and is particularly careful about U.S. fixed income, where he believes there’s a higher risk of losses if the market perceives that the Federal Reserve is changing its current monetary policy. He also is staying away from investments in Europe.
Instead, he sees opportunity in Asia, particularly in Vietnam and frontier countries that are starting to develop.
With U.S. stocks, Butnaru is advising clients to buy energy and health care equities. “We do not purchase individual names in those sectors,” he says. “We try to look for those managers that on a risk-adjusted basis provide the best return.”
He’s also bullish on bank stocks, not because of their earnings potential but because he foresees mergers and acquisitions leading to higher stock prices. “I think there is opportunity.”
Butnaru says he is neutral on high yields (junk bonds). However, he believes there will not be as many defaults as in the past. “If a bond gets 4% to 5%, that will help with income in a portfolio. The key is to find the right manager who can manage quality high yields.”
Butnaru says global investors “need to know that the safest places to invest may not be as safe as they used to be. What has performed well in the past five years might not in the next five years.”
Next page: Jack Kuhn, enior Vice President, Managing Director for Florida West Coast BMO Private Bank