Our Equity Top Pick List
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India: A Changing Economy and Society
We are taking a closer look at India—which is also featured in our Investment Outlook—in a multi-part analysis. In our most recent installment, we examined the major stages of development following the country’s independence; now, in addition to the changes in India’s economic structure, we are focusing on the country’s demographics. On the positive side: India is the world’s most populous country, yet the median age is significantly lower than in China, for example. According to plans, India is set to be transformed into a developed economy by 2047, and education will play a key role in this, as the country aims to increase the number of students enrolled in higher education over the coming years.
Commodities - Technical Analysis
Gold and silver continue to follow a downward trend. Following the long-signal from two weeks ago, oil is currently undergoing a strong retest; the coming days will determine whether it remains justified to seek long positions. Natural gas prices are rising at an accelerating pace. Copper has reached the calculated level, which it failed to break through even on a second attempt; however, its trend is upward, so it may soon attempt to reach new highs again. Both wheat and corn are in a trend-like decline: the upward trends have broken, so it is not advisable to seek positions on the buy side for the time being.
Our latest Investment Strategy recommends an overall neutral exposure to the equity asset class over the next 6-12 months. We believe this should be taken into account when making investment decisions in individual equities (the timing of investments or the size of positions).
The list includes those stocks, typically US and European ones, that we consider to be proper investment choices from a fundamental point of view. At the sector level, we examine the relative position of each stock on the basis of indicators (like valuation, profit growth prospects, indebtedness, quality), and then, after an individual analysis of the best performers, we select the companies we consider most attractive from a risk/return perspective.
Given the fundamental selection process, the stocks on the list should be treated as longer-term investment opportunities, but are reviewed on a quarterly basis to check whether the stock is on track with our original expectations or whether there is a sector peer with a better risk/return profile. The list can provide a starting point for building a sector-diversified equity exposure in portfolios, but can also be used as a watch list. In the latter case, the technical analysis methodology should be used to time/determine the specific investment decision. This is the purpose of our Trading Ideas report, which will also provide a specific trading strategy for the stocks on the list, if indicated.
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