Where should we look for investment opportunities in the coming 12 months? What investment categories will offer stable returns and the opportunity to spread risk? The specialists of the American wealth management firm, BNY Mellon, tackled the subject in a research note.

Pal Flood, lead manager of the multi-asset income fund, sees opportunities in India for example. He expects Indian stocks to do well in the long term. He is expecting the positive dynamic in the population and the agenda of strong reform of the current government will affect stocks positively.

Investment Opportunity

Furthermore Suzanne Hutchins, portfolio manager real return strategy, mostly sees opportunities in companies with great cash flow. She also finds that companies with a strong competitive position and that are disciplined with their capital will come out on top. She pointed out the fact that the majority of investors are looking at the short term market sentiment, but that this unrelated to the fundamental reality.

At the same time Hutchins mentioned gold, a hedge against unexpected events on the market. The yellow precious metal offers diversification in a world where the pressure to devalue currencies – in an attempt to fortify competitive positions  – is only growing.

There are also opportunities in Latin America and countries like Portugal, Spain, and Italy in Europe, according to BNY Mellon. Raman Srivastava says that many sectors in fixed income are priced too high, especially when government bonds and debt with a high rating is involved. Srivastava, co-deputy CIO at Standish, believes that there are still opportunities in local markets in Latin America and high yield corporate bonds.

European Investment Opportunities

Srivastava also thinks Australian bonds and certain European countries in Europe are attractive. He expects volatility to remain relatively low and that, if interest rates will rise, a long position in the US dollar would counteract this.