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Bob Doll, of Nuveen Investments, doesn’t think that Tuesday’s election was a “game changer” per se. However, he does think that the results could benefit several stocks.
Now that the Republicans have taken control of Congress, “faster adoption of liquefied natural gas exports from the United States is likely to be on [their] radar screens, and this development would be a positive for the energy sector,” writes Bob Doll. “Additionally, the GOP will probably push for increased defence spending, which could benefit companies in that industry.”
The Upcoming Rates Rise May Cause Bond Market Liquidity To Shrink (Charles Schwab)
The structural changes in the bond market, combined with the upcoming possible Fed rate hike, may cause too many investors to sell their bonds at the same time — which will disrupt the market liquidity.
As a result, now investors should “take liquidity into consideration in [their] income investments” and “focus on time horizons,” writes Kathy A. Jones. Additionally, investors need to look at the level of cash in their bond funds, because those that hold large amounts of cash may underperform in the market.
And finally, investors should “try to avoid selling during major liquidity events” and “understand the level of volatility [they] are willing to bear when investing in the various sectors of the fixed income markets before a market even occurs,” writes Jones.
It’s pretty simple when a wealthy client wants to give a large chunk of money to one organisation. But that’s not always the case: Sometimes wealthy clients want to divide up their wealth for multiple groups. In such cases, advisers should consider a donor-advised fund, or DAF.
With a DAF, the client makes “a single charitable gift of assets to a donor advised fund; many organisations and financial firms sponsor such an entity. Then the donor can have the fund send money to as many charities as the client likes,” according to Donald Jay Korn.
The dollar is strong right now, but that’s not only because of a strong US economy. In actuality, the dollar’s relative strength is, in part, due to the global economy’s relative weakness. Former economic powerhouses in Japan and Europe are struggling, so much so that their central banks need to ease monetary policy.
“For now we continue to expect a world in which US growth overshadows that of other developed countries, resulting in a strong dollar and weaker commodity prices. However, this situation could in turn lead to extraordinary stimulus measures by other central banks which, in turn, could benefit their stock markets,” writes Russ Koesterich.
Despite all the bad overseas news, BlackRock remains bullish on Japanese stocks because they “should enjoy the tailwind of aggressive monetary policy” by the Bank of Japan in the same way that the US has been buffered by the Fed in recent years.
Companies — whether they’re as big as Google or just a small entrepreneurial firm — are increasingly starting to adopt machine-based learning. And that has implications for inventors because they will have to value companies in a different way.
“This technological shift is changing how investors gauge a company’s potential in terms of its intellectual property,” argues Benjamin Ruegsegger. In the past, investors would look at a company’s patent portfolio, but now they should look at “how many machine learning experts are on staff” because “more talents leads to better products and smarter capital spending.”
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