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Friday, March 29, 2024

Most retail investors plan to increase stock market exposure—COL

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Retail investors plan to increase their stock market exposure over the next three to six months despite the less bullish outlook on the equities market, according to the latest investor sentiment survey conducted by online brokerage firm COL Financial.

COL Financial Investment Management president Marvin Fausto said in a news briefing 71 percent of investors surveyed were more likely to increase their stock market exposure, while 29 percent said are they would decrease their exposure.

Fausto said investor sentiments shifted to neutral from bullish outlook at the start of the year and cited high inflation rate and global recession as the major risks for the market.

“The investor sentiments have actually shifted to neutral from bullish. They think the market will move sideways from where were are now,” Fausto said.

COL Financial chief equity strategist April Lynn Tan said local investors should prefer bonds and real estate investment trust firms over stocks over the next six months to ride the “difficult” second half of the year.

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“Among different asset classes, we think bonds and REITs will perform best in the short term because of their steady interest income/dividends, which are more valuable in a falling interest rate environment,” Tan said.

She said that the worst might be over as commodity prices began to fall, while a possible recession in the United States would increase the likelihood that the US Federal Reserve would stop raising rates soon.

Tan said interest rates and the peso may have peaked, but the weaker economic growth outlook would hurt corporate earnings and sentiment for stocks.

COL Financial’s stock picks include defensive stocks from the power and telecom sectors and consumer staples.

“Since inflation is no longer an issue, we believe it is a good time to start accumulating growth-oriented stocks that are trading at very cheap valuations. We recommend focusing on larger cap stocks with strong balance sheets, that pay cash dividends,” Tan said.

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