It can be hard for even the most savvy of investors to cut through the noise of financial advice, market predictions, and mixed economic signals. So let’s keep it simple: where should you invest $10,000 today in these market conditions? I spoke to five financial experts with different perspectives and roles to hear their advice.
Before even thinking about where to invest, you should make sure that you have three-to-six months of living expenses saved in an emergency fund and that you’ve paid off any high-interest loans. Also, these experts aren’t speaking to day traders. They have in mind a time horizon of seven years or more, which is enough to cancel out the effect of short-term market gyrations.
1. Jennifer Foster, co-chief investment officer and equity portfolio manager at Chilton Trust:
Foster explained that investing in companies that have a “catalyst on the horizon” is a strategy to blunt volatility during a tumultuous market period such as the one we’re in now. This means look for firms that have a likely positive event, such as a growth opportunity, in the near future. Foster also has a standard set of metrics she uses to evaluate companies—they must have strong returns, growth opportunities, and strong cash flow. She suggested investors consider Canadian Pacific Railway (CP) as a stock that has competitive advantages, reliable revenues, and substantial cash flow. “CP has excellent operations, strong management, and serves customers as a low-cost and energy-efficient provider of essential freight transportation,” she explained.
What’s on the horizon for CP? “It expects to complete an acquisition of Kansas City Southern Rail within the next six months, which will create the first ever continuous transnational rail network, reaching every coast in North America,” explained Foster. The company plans to construct single line routes that would create lower-cost alternatives for commercial transportation and reduce carbon emissions. While the transaction is not completed yet, Foster believes regulators will support the acquisition. “In volatile market conditions, I encourage investors to look for high quality companies with catalysts that can result in value creation,” she said.
2. Rayna Lesser Hannaway, portfolio manager and analyst at Polen Capital:
Cybersecurity is in at Polen Capital. “[Cybersecurity risks] are a problem that companies can’t really skimp on. If you want to be resilient as a business, you have to maintain vigilance as it relates to security,” Hannaway explained.
She suggested investing in two specific cybersecurity companies: Qualys and Dynatrace. Qualys is a cloud based software firm that offers its customers visibility into where their IT systems are susceptible to cyberattacks. “The company’s really known for its accuracy and scalability, they’ve been really smart over time. They listen to their clients needs and are investing their research and development dollars in the right areas,” Hannaway explained. She added that the company is just seeing high growth rates, but is backed by impressive profit margins as well. “Over the long term for Qualys, we believe that they can sustainably grow their top and bottom line by at least 15% per year, for several years, while also turning those earnings into really strong free cash flow,” she said.
Another cybersecurity company Hannaway recommends is the software company Dynatrace. According to Hannaway, the company is growing at over 30% per year and has a 29% free cash flow margin. “Whether it’s Dynatrace or Qualys, the way I would think about it is that these aren’t solutions you can turn off. People are so worried right now about where companies might scale back. You can’t scale back on security,” she said.
3. Adrian Helfert, chief investment officer at Westwood:
Helfert suggested that those looking to invest now could turn to energy. “I find that many investors are still under-exposed to the energy sector, and not just oil and gas, but green energy as well.” He explained that, especially as more companies turn to sustainable energy production, increased government and consumer investment in these areas will lead industry growth in both renewable energy and traditional fossil fuels energy sources. “I would say finding a good fund that has strong exposure and ideas around investment in the energy thematic,” he said.
4. Tori Dunlap, personal finance educator:
Dunlap focuses on personal finance education aimed towards women and has 2.2 million followers on TikTok. Sometimes the simplest solution is the most effective: “If I personally was given $10K to put in the market, I’m putting it in a low-cost index fund like Vanguard Total stock Index Fund,” she explained.
“[I]nvesting is a long game — years if not decades — and you haven’t actually “lost money” unless you sell,” she emphasized.
5. Milan Singh, personal finance educator:
Singh, whose financial advice is popular on TikTok where he has 2.4 million followers, said that he tells investors to go with blue-chip stocks that bring consistently strong returns. But he thinks how you invest is just as important as what you invest in. He suggested putting money into a Roth IRA retirement account invested in the S&P 500 index. The benefit of a Roth IRA is that the contributions are only taxed when they’re put into the account, so the money then grows tax free. A fund that invests in the S&P 500 is the safest bet for the average investor looking for stable returns. “For most people, for the average person, the S&P 500 is going to be the best bet,” he said.
He added that investors looking to invest in any one company should know the industry well so investors can understand the business model. “If you want to do some research, individual companies potentially get a higher return. Look into the companies that you’re already using the products of,” he suggested.
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