Business News

How I will invest this year

| More

by Peter Switzer

This is my last working day off before my Sky News Business Channel program kicks off on Monday and another year of talking to experts, business leaders, business growers and politicians lies ahead. And so how do I intend to invest this year?

I should advise those who might want to take a lead from me that you might want to check out Wednesday night’s show as I will pit the bears against the bulls on what their crystal balls are telling them for the economy and the stock market for the year ahead.

In one corner there will be the country’s most prominent bear — Associate Professor of Economics and Finance at the University of Western Sydney, Steve Keen — aided and abetted by Wesley Legrand from Grand Private Equities. They will beat up on debt-laden economies and argue the case for Armageddon.

In the opposite corner is eternal optimist Clifford Bennett from Herston Economics and Ron Bewley — former chief investment officer for the Commonwealth Bank Private Wealth and now head of his own research firm, Woodhall Investment Research. Ron has been an Associate Professor of Econometrics at University of New South Wales and Sydney's University of Technology and I expect will be bullish on the markets for this year.

Double-digit rise

I’m tipping a double-digit gain on stock markets with Goldman Sachs predicting a 20 per cent gain for the US stock market. They could be over-the-top in going for 20 per cent, but it makes me comfortable tipping an uppish year.

The debt worry warts presume Goldman Sachs and other big name banks have ignored the debt overhang and that’s why they’re so optimistic, but I believe the bears have discounted the booms in China, India and Brazil, to name a few, that will keep global growth going. The IMF forecasts 4.4 per cent growth for the globe and that will help our commodity-based stocks and help the market rise.

Commodities to gain?

The highly regarded market analyst Jim Rogers is also punting on commodities.

“If the world economy gets better, commodities are going to make a fortune,” he told CNBC. “If the world economy does not get better, commodities are the place to be because they are going to print more money, and that's how you protect yourself.”

He actually isn’t a fan of stocks this year but likes the actual commodities. I think he’s right about commodities and that’s why I like Aussie miners, in particular.

Buy the dips

I expect some market sell-offs and will be buying the dips. I will be buying miners and great dividend paying companies, as I’m a long-term investor. And I will also be buying ETFs that track the market, such as S&P/ASX 200, when the market dips happen.

I reckon it will give me a return around 10 per cent plus but if it doesn’t happen this year, it will happen the year after or the year after. As a long-term investor, the market has a great knack of returning around 10 per cent per annum over a 10-year period.

Check it out

If you want to be on the money, keep coming to this website and check out Switzer on Sky News Business Channel at 7pm or 10pm Monday to Friday.

If I change my mind on my investments, you will be the first to know about it.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer and Paul Rickard the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.

Published on: Friday, January 28, 2011