Blue-chips might be your best bet
Investors should not panic and focus on the best opportunities which can still be found in blue-chip companies with a long history of paying dividends, according to Franklin Templeton.
Franklin Templeton’s head of equities, Stephen H. Dover, said that under current circumstances many investors were acting out of fear and missing out on the market opportunities, instead of staying invested in the market and using the time to assess where the opportunities still existed.
“We believe some of the best opportunities may be in blue-chip companies that have a long history of paying dividends,” he said.
“Dividend yields may decrease as dividends could be reduced, but we are not seeing a massive shrinking in dividends at this time.”
According to Dover, high correlations between equities continued as investors were selling their holdings in passive vehicles, which in turn, resulted in selling of all stocks proportionately.
“It’s too late to panic-sell. In our view, it’s better now to consider reallocating within equities and to potentially rebalance asset allocations in balanced portfolios. We believe the current market should provide long-term opportunities for investors who stay the course or take opportunities as they arise.”
AUTHOR
Oksana Patron
Recommended for you
The Reserve Bank of Australia's latest interest rate announcement has left punters disheartened on Melbourne Cup Day.
Equity Trustees has been selected as the responsible entity for two new funds, one from Coller Capital focused on private equity and a second investing in fixed income from FIIG Securities.
Funds managers are being urged by financial advisers to improve their “outdated” education and communication about alternative funds as they actively target them towards retail clients.
GAM Investments has appointed Eric Finnell as its managing director for Australia after his predecessor left to take up the CEO role at Global X.
