Unless you’ve only just emerged from a cave in which you have been living without TV or the Internet since early 2016, you’ll be aware that last year saw two particularly significant events capable of long triggering economic ripples. The first was, in June, the UK voting to leave the European Union; the second, the following November, was Donald Trump’s US election victory.
These two events, it can be confidently said, have changed the game for many investors. Perhaps you have spent a lot of time cultivating a particular portfolio, only to find yourself reassessing it in the light of Brexit and the recently begun Trump era.
While we don’t have a crystal ball in which to see how everything will pan out, we can still make educated guesses on where you could most fruitfully invest this year. Here are some of our most recommended picks for 2017 investment.
The United States’ wealthiest company, Apple
Apple is one of the world’s leading companies in terms of its innovation drive, cultural significance and, of course, monetary potential. Admittedly, in recent times, we have seen observers of the company express some concerns – such as Apple’s slowing sales and earnings during 2016 and rising reliance on the iPhone. The product line has long accounted for about two-thirds of Apple’s sales.
However, in an opinion piece for investment advice portal The Motley Fool, analyst Bradley Seth McNew remarked that “if I could only buy one stock, Apple continues to look like a great stock to buy and hold as a core long-term position”. In justification, he cited factors including Apple’s continually growing user base, which could help fuel the similarly continuing growth of the firm’s services segment, and huge cash pile of well over $200 billion.
Apple actually stores roughly 90% of that money outside the United States to avoid paying hefty repatriation taxes. However, with Trump having indicated his desire to offer a significantly lower tax rate that could drop to as little as 10%, this policy would allow Apple to more immediately spend. Autonomous cars and augmented reality are two particularly promising areas in which the Cupertino-based company could make significant financial outlays.
UK-based clothing retail chain Next
The clothing and home products retailer Next, which is headquartered and primarily operates in the UK, had a tough 2016. In fact, in March 2008, it reported experiencing its most difficult year since 2008, when the global economic crisis took hold.
Next’s difficulties might not see relief in the immediate future; indeed, the company has itself hinted, through a trading update, that growth in 2017 will be negative. However, there are signs that the company could be something of a sleeping giant. Simon McGarry, a senior equity analyst at Canaccord Genuity Wealth Management, has expressed enthusiasm about Next to This is MONEY.
Noting that Next has seen a 90% growth in revenues and tripling of profits since 2002, McGarry adds that it is no stranger to weathering financial storms. He explained: “They’ve been in this position before – notably 1993, 2001 and 2007 – and their response this time around will be no different.” There won’t be any efforts to engage in brand repositioning or the sacrificing of margins, he said.
UK property – especially regional property
In March, there was a seriously eye-opening sight at Mipim, the commercial property sector’s annual meeting in southern France: local authorities from the UK advertising their areas, including Manchester, the Midlands and Newcastle. They were vying for attention from investors at an event where you would more typically expect to see British tourism bosses.
Even the national British government had an exhibition stand at the event. The Telegraph reported: “Following the [Brexit] referendum vote, many feel it was there to quell any fears that the UK is closed for business.” Whether you are based in the UK itself or elsewhere, you could benefit from taking heed of this message – particularly if you have been mulling over property investment.
You could reap the best returns by investing in the British regions rather than London, where rising prices could cut uncomfortably far into your yield. Rob Wilkinson, chief executive of the asset management company AEW Europe, has reported his company “find[ing] London challenging from a pricing standpoint, whereas in the regions, the pricing is not as acute and the occupational side is pretty good in most city centres.”
An especially appealing city for investors is Leeds, largely due to the West Yorkshire settlement’s many financial institutions. In this city, students are also common, and yields can easily exceed 8% – adding to the attractions of investing in buy to let Leeds property with Flambard Williams. That company’s investment property consultants could also help you to make money from investment in other major UK cities such as Liverpool, Sheffield and Bradford.