Specialists recommend prudence on a long run
The primary recommendation of specialists is prudence. For a time horizon longer than two years, with a quarter of your available cash, you can buy stocks only with prudence and gradual amassment.
“My recommendation is to avoid investment of more than a quarter of the cash available now. Last year I was saying half, but now I suggest only a quarter. I still recommend however to invest with a more prudent pick of stocks”, said Paul Brendea, analyst at Prime Transaction (photo).
One of the most important factors that a broker should take into consideration when offering an investment recommendation, is the time horizon.
“When the investor plans for a long-term investment, I say that the gradual acquisition of solid stocks is the most fit in these times, a fundamental expertise of issuers highlighting an undervaluation, mainly due to the financial crisis. When the effects of the crisis will lose weight, they will be important premises for a regeneration of the global economy, the investors’ approach towards the attractiveness of issuers at BSE heralding a new bullish trend”, said Gabriel Lade, broker and front-office director at Intercapital Invest.
Thus, as the time horizon is a core factor, a long-term investment is highly indicated at this point. Marius Pandele, head of research at Vanguard recommends a 4-5 year period, interval when the global economy will revive and quotations will bounce back to top.
“For those who don’t want or cannot wait for so long, it takes extreme prudence and focus. Investors have to consider both the spot and derivative market from Sibiu, where they can go on to short time horizon”, he added.
Another important indicator that should indicate a growth potential and therefore, appetite for buying, is the fact that the issuers are now selling short, compared to their real potential.
“Summing up to the fact that large companies in Romania listed at the stock market are probably the biggest taxpayers at the state’s budget, and the current market value of the stocks based on financial analyses indicate that they are heavily underrated compared to their performances and perspectives, I think this is the best profit-making opportunity for those with liquidities to buy shares at these low prices”, said Rares Sofariu, research and development manager at KD Capital Management.
Is there stability in the stock trading arena?
The most stable issuers are now the companies active in requisite fields of economy, experts say.
“Fields such as energy and utilities are worth to be taken into consideration. On a short run, it is very important to lay eyes on the financial situation of the issuers and their dividend policy in these shaky grounds”, said Rares Sofariu.
Gabriel Lade explained that the state’s monopoly in Transgaz and Transelectrica is an additional source of stability and confers comfort to stockholders. “Meanwhile, the drug companies may be a reliable target for investors, the demand for pharmaceutical products maintaining at a relatively constant level even in crisis”, Lade pointed out.
It is rather difficult to talk about stability, Pandele added, as long as most of the stocks drop at the same speed.
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