Five way to make the most of the current bull run
City consensus is that record-breaking stock market still has legs
"SELL IN MAY and go away. Come back on St Leger Day," goes the adage. But should you sell in May? Not on your nelly seems to be the considered view of investors this year, says Mark Atherton in The Times. The consensus in the City is that the record-breaking stock market rally "still has legs". Here are some suggestions for making the most of the bull run:
Go cyclical. Tap into the expected UK recovery by picking stocks that prosper in an improving business climate. Jeremy Batstone-Carr of Charles Stanley likes the ad giant WPP; he also tips publisher Reed Elsevier.
Diversify overseas. Juliet Schooling of Chelsea Financial Services is a fan of global funds, such as M&G Global Dividend and Newton Global Income which "spread your investment risk and help iron out currency differentials". Her US choice is AXA Framlington American Growth which "has a mid-cap [medium-sized company] bias and seeks out companies which offer strong organic growth". For Japan, she picks J O Hambro Japan – also strong on mid-caps.
Momentum. A strategy favoured by Brian Dennehy of fundexpert.co.uk is to go for maximum return in a short space of time. Look for "aggressive funds" that have outperformed in past six months and could repeat the trick. He likes Artemis Capital, Invesco Perpetual UK Aggressive, and Standard Life UK Unconstrained.
Income Stream. Defensive shares paying attractive dividends have fuelled the current rally and are now looking expensive. But it may still be worth paying for quality, says Jason Hollands of Bestinvest. "Even if share prices are volatile, you have the reassurance of knowing you'll get a solid dividend at regular intervals." He favours Threadneedle UK Equity Income and Fidelity Moneybuilder Dividend fund.
Multi-asset. Having too much money in shares could give you a bad hangover when central bankers eventually withdraw the punch-bowl, says Patrick Connolly of Chase de Vere. So spread your cash across a range of assets including fixed interest and commercial property. For the former, he favours Kames Strategic Bond and Jupiter Strategic Bond; for the latter, M&G Property Portfolio.
This article appears in the 18 May 2013 issue of The Week.