The Market’s Untapped Opportunities and How to Find Them

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The Market’s Untapped Opportunities and How to Find Them
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The Market’s Untapped Opportunities and How to Find Them – Why Now Is A Great Time to Look for An Investment/Portfolio Advisor. 

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Q2 2020 hedge fund letters, conferences and more

Market opportunities abound  - despite the turmoil - you just need the right advisor to help mine them, according to Colleen MacPherson, CFA, Portfolio Manager and Director of Research at Penobscot Investment Management. And she would like to help you find one.

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Colleen MacPherson and her fellow advisors at Penobscot Investment (PIMboston.com) are fielding questions on some of the issues below (in addition to the usual questions these days about the market) and thought this might be a helpful piece for consumers who are confused as to how to find hidden opportunities in the marketplace and to understand that it first starts with how they choose an investment advisor. The aim is to help them ask the right questions, define their goals and get to where they want to be in terms of their investment portfolio. Even in today's market conditions.

How To Find The Market's Untapped Opportunities

  • The market is volatile - times are continuing to morph and change
  • Markets seem harder to understand than ever - people continually ask - where are the going?
  • Many younger investors are entering the market - taking chances with free trading apps such as Robinhood – with zero guidance for long-term growth
  • The stock market appears to be "doing so well” yet the economy is doing poorly. Why? In reality, all tides are not moving together. The bulk of returns are coming from a small cluster of stocks.
  • A lot of the returns in the S&P 500 have been generated by five companies i.e. FAAMG – if you strip out those 5 companies from the S&P 500 you have a negative return for the year.
  • These 5 companies have extremely high valuations and unless you have a bearish outlook on the broader economy you should be looking for other opportunities
  • However, there are many opportunities for growth.
  • Seeking out these pockets of the economy and adding diversification amongst sectors and industries is incredibly important for long-term investment performance.
  • A trusted advisor is crucial. And the key word for you is Trusted. It has to be someone who meets your need.
  • As we deal with the current up and down nature of the market, people may be realizing – “oh no, I made some mistakes along the way – I need to talk to someone.” But who?
  • A trusted investment advisor will discuss goals, overall strategy and next steps. It’s not just about your wealth, it’s about your life. It is about building wealth and maintaining it so that you can meet your long term goals.
  • In the end the benefits of having an investment advisor and a long-term plan is necessary to preserve and grow your wealth.
  • It is important to understand if your investment professional is acting as a fiduciary or not.
  • Is the individual working with an advisor or broker or dually registered entity? Under the Advisors Act, advisors are required to act in the best interest of the client (fiduciary). Brokers on the other hand are paid commissions for selling certain products and thus are not necessarily acting in the best interest of the client. Dually registered are doing a little bit of both. To understand this best, here are the questions a client/prospect should ask is how are the financial professional is compensated for his or her services.
  • If you are looking for long term growth and stability, here are some questions you may want to consider asking when interviewing a potential investment advisor.

About the Author

Penobscot Investment Management Colleen MacPherson, CFA, Director of Research, Portfolio Manager

Colleen MacPherson, CFA is Director of Research. MacPherson oversees the firm’s research efforts to identify opportunities in equities, fixed income and other asset classes. She also services clients as Portfolio Manager.

Prior to her tenure at Penobscot Investment Management, she was a Fixed Income Product Manager at Eaton Vance as well as a Banking Specialist at Brown Brothers & Harriman.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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