The world of investments can be daunting to anyone who lacks expert knowledge in the field. Thankfully, Alexander Studhalter is on hand to provide his valuable insight on what we should and should not be doing with our money. An entrepreneur and businessman with over 30 years of experience in investments, real estate and private equity, Studhalter is one of the most trustworthy names in the game, inspiring many people to take on his advice and make sound investments.
Why now is a good time for long-term investors?
According to Alexander Studhalter, almost any time is a good time for foreign investors to look to the US market, “There is so much wealth concentrated in the USA, more than at any other point in history.” he says, “The market also has great liquidity; the value of shares on the New York Stock Exchange and NASDAQ are much higher than other major global stock exchanges, such as London or Tokyo.”
Studhalter also points to the high turnover rates in the US, “That means if you are looking to buy shares, there is almost always someone who is willing to sell! The diversification helps too, with more companies providing different sectors to invest in than any other country.”
So much variety, but what is the best investment right now in the USA? Mr. Studhalter has used his professional experience to single out a few companies, “Enphase Energy stock is certainly one to watch. They have seen some impressive growth over the last few years with earnings forecasted to rise 81% this year to $4.37 a share, from just 10 cents in 2018. Another company with steady growth is the Texas Roadhouse dining chain. Its stock price has climbed 9% in 2022 and continues to be one of the best-performing restaurant brands in the United States, allowing it to outperform the overall stock market. Also, despite posting a loss for the third quarter, Boeing is experiencing a turnaround, with stock up 3% just in the last month. With an apparent deal with United Airlines on the horizon, now should be an ideal time to invest in the aircraft manufacturer.”
Why is the US market going up after hitting bear market lows in the first half of 2022?
Inexperienced foreign investors can be discouraged from investing when they hear a country is in a bear market. But what is a bear market? A bear market is when a stock market is experiencing a decline of at least 20% from recent highs. With the US market in decline in 2022, the S&P 500 was down 22% in the third quarter from the beginning of the year, putting it in the bear market region.
However, the market is now picking up and Alexander Studhalter points to history to provide reasons for this; “October is known as a ‘bear killer’ when people have often started to invest again after declines. Another factor, particularly for 2022, is the US Midterm elections. During midterm years, often for Democrat presidents in their first terms, we tend to see declines in the market, which then pick up once the elections have passed.”
Thanks to his 30 years of experience in investing, Studhalter knows this can now be a very beneficial time for investors, “Now the bear market period has ended, we are entering a ‘sweet spot’, this is the initial growth after a bear market which usually lasts for a few quarters, meaning we have a good chance of seeing strong returns on investments we make in this quarter.”
After a tough 2022 for a lot of people, Studhalter understands why people may be cautious, but has pointed to some low-risk investments to make now, “Caterpillar stock had a surge earlier this year and is now expected to continue steady growth, thanks to the US government’s recent spending packages. They could have around £1 trillion to use on production. Dexcom is also worth watching. With a flat base of 123.46, FDA approval of its new sensor should see gradual growth continue for now.”
Why do foreigners invest in the United States?
We hear a lot about the growth of newer economies around the world, plus, some smaller countries tend to attract a lot of foreign direct investment (FDI). But one of the older economies, which happens to be the largest – the United States – remained number one for FDI in 2021. Alexander Studhalter explains that “the US has the diversity and liquidity that I mentioned, which is attractive to foreign investors, but the statistics around FDI are not always a true reflection of the economy. For example, many multinationals have offshore financial centres where money flows through before reaching its final destination, which influences the figures. But still, the US market being so transparent and accessible means it continues to grow ahead of the booming Chinese economy, plus countries like Ireland and the Netherlands which have a small Gross Domestic Product but have good incentives for overseas investors.”
New legislation could impact that, however. The White House announced in September that under a new executive order, more restrictions and administrative checks will be placed on foreign investments, owing to some countries using such investments to access sensitive data and technology. “These restrictions could stunt growth but the US market will remain one of the most open and opportune for those looking for long or short-term investments,” according to Alexander Studhalter.