Tuesday saw a rise in the price of the reissued seven-year Treasury bond (T-bond), but…
Bonds and REITs have a better track record than stocks.
According to an online stockbroker, until the second half of the year, bonds and real estate investment trusts (REITs) are predicted to do better than stocks since most individual investors intend to raise their stock exposure due to concerns about inflation.
Marvin Fausto, president of COL Financial Investment Management, gave a virtual news conference on Monday and reported findings from their poll of investor sentiment, which showed that the majority of these investors are still very heavily invested.
Fausto stated that they prefer to invest in locally-managed funds that cover a variety of asset classes, including equities, bond or money market, and government or corporate bonds, aside from local stocks.
Bonds and REITs, according to COL Chief Equity Strategist April Lynn Tan, will outperform equities in the short run as interest rates decline and there is a growing expectation that these financial products would generate a fixed income.
The REIT law makes it possible for both small and large investors to own real estate assets, offering middle-class families and overseas Filipino workers (OFWs) a different and secure investment option. It also gives real estate companies access to a less expensive source of capital as they support the growth of the Philippine capital market.
“And then, if you want to buy common stocks, I think the emphasis should be more on defensive stocks, such as power companies, telcos (telecommunications), and even consumer staples because it looks like they would profit that would be more defensive or resilient if the economy is going to weaken,” Tan said.
Tan urged investors to concentrate on larger businesses with sound balance sheets and dividend payers when it comes to other growth stocks.
Tan predicted that the economy would rise rapidly in the second quarter of 2022, given that the previous year’s base was below average due to several lockdowns related to the coronavirus disease 2019 (Covid-19).
For analysts like myself, we’ll be on the lookout for signs of how consumer spending will do in the second quarter despite the rising inflation environment. I would not be surprised if it was still strong, so hopefully, it was,” she continued.
On August 9, figures for the nation’s second quarter’s gross domestic product (GDP) will be made public.