Buffett and Rogers advise buying funds: a selection of mutual funds and ETFs for 2022



2022/01/08

Buffett and Rogers advise buying funds: a selection of mutual funds and ETFs for 2022

For financial markets, 2022 is likely to be less profitable than the previous one. Passive investments through BPIF and ETFs can be a good way to diversify a portfolio in an uncertain environment.

The year 2022 may become even more unpredictable for investors than the previous one. The main topics will remain inflation and its consequences, possible new strains of coronavirus, new "black" and "white" swans, which Bloomberg does not exclude. Saxo Bank's "shocking forecasts" for 2022 suggest that female investors will be able to deploy markets, and scientists will figure out how to rejuvenate cells and much more.

The demand for "dreams, ideas and technologies of the future" will weaken, and investors will pay attention to companies that can generate stable profits here and now.

Diversification of investments in 2022 is not just a good recommendation, but a mandatory approach for investors. Stock-picking (purchase of individual shares) remains for those who have a lot of experience, are ready to spend more time analyzing securities than usual, and most importantly, they are ready for the fact that even after a thorough analysis, there may be a high probability of a decline.




Which strategy should I choose for 2022 — passive or active?

When deciding on the choice of an investment strategy - active or passive - a private investor should remember that successful investments can be made when investing in something he is well versed in, Jim Rogers, a well-known American investor, shared his opinion during a meeting of the RBC Pro Investors Club. "Many studies have proven that investments in the index behave better than active investments. Therefore, it is preferable for most people to invest in ETFs that follow the indices. And it is quite obvious that such investments are superior to any investors — both professional and non-professional," Jim Rogers added.

Berkshire Hathaway CEO Warren Buffett also advises private investors to buy funds. "Most investors are more likely to benefit by simply buying the S&P 500 index for the long term, rather than selecting stocks themselves, even if they are Berkshire Hathaway shares. The average person is unable to independently select shares," he said during the shareholders' meeting of the financial conglomerate.

The advantage of passive investments is that they do not need to choose the time or moment for investments. They are relevant for any phase of the stock markets or the economic cycle. However, investing in funds only makes sense in the long term.

The fundamental principles of passive investing are the time horizon and regularity: the longer the investment period, the better the result can be obtained. One year is the minimum recommended period for investment, so we recommend looking at a broader horizon, not just 2022, but three to five years or even more," Malin emphasizes.

Why investments in ETFs and mutual funds can win in 2022

Exchange-traded funds are a diversified set of securities within the framework of an investment idea. Having bought shares of four or five mutual funds, the investor receives a ready-made portfolio that will be invested in dozens or even hundreds of securities at the same time. At the same time, an investor does not need to have in-depth knowledge of financial instruments to manage such a portfolio.

We saw all the growth in 2021. The American markets gave more than 20% growth, and it is unlikely that we will see similar dynamics in the future. I consider it expedient to invest in funds with active management and in funds with absolute profitability in 2022. That is, in those funds that will be looking for profitability, and not an idea and one direction.

In 2022, Chinese stocks have a good chance to win back. Regulatory pressure is gradually decreasing, and more and more analysts are speaking positively about the prospects for Chinese stocks. At the beginning of 2022, we can see enough positivity for the dynamics of Chinese indices to change to positive. In addition, there are other emerging markets in the compositions, which in 2022 have serious chances to overtake the dynamics of the S&P500 - if the situation with vaccines normalizes and investors do not want to take risks in the overheated IT sector of the United States, they will turn their eyes to emerging markets.

As a result of the next round of strict regulation by the government, they have become outsiders in 2021. This means that they will certainly be one of the leaders of 2022. At least now the companies are so cheap that it's a sin not to take. China is the second economy in the world. It recovered faster than many countries from the initial pandemic shock: the worst indicators of GDP growth rates were recorded at the end of March 2020, and not at the end of June, as it was, for example, in the United States. And reforms aimed at demonopolizing business and strengthening the moral foundations of society in the long term should benefit it. Accordingly, ETFs based on Emerging Markets Internet & Ecommerce (NYSE Arca: EMQQ) will be suitable, which, in addition to shares of Chinese technology companies, includes shares of companies from South Korea, India, the Netherlands, Singapore and other countries: Internet services, retail, broadcasting, media, online advertising, games, travel, social networks.

Semiconductors

In 2022, the problem of a shortage of chips in the world will continue to persist, and companies in the sector will continue to earn record profits. The sector has been showing a yield of 27% per annum for the last ten years. And with the increasing digitalization of our lives, this trend will only continue. Therefore, among the thematic funds, we would now prefer the semiconductor sector.

Green energy

Experts also do not rule out growth in alternative energy sectors. To invest in it, you can use the Renewable Energy Producers fund from Global X (NASDAQ: RNRG), which includes more than 40 companies engaged in the production of electricity from renewable sources (water, wind, sun, heat from the earth's interior, biofuels) in more than ten countries (USA, Canada, New Zealand, Brazil, Austria, Denmark, Portugal, Thailand, Hong Kong, France, etc.). the topic of green energy will remain quite hot, but we must be especially careful when investing in it, since the risks of individual companies are very high. Therefore, thematic funds will help reduce risks and participate in the strongest trend of the next 30 years.

Gold

In 2022, the markets will not grow — rather, they will remain in place, and therefore it will be quite difficult to make money on them. The only ETF that I recommend to include in the portfolio is the gold ETF. And also, if high inflation continues, Commodity ETFs: coffee, cotton and possibly oil.

Michael Zippo
https://linkedin.com/in/michael-zippo-9136441b1
[email protected]

Sources: Berkshire Hathaway, RBC Pro Investors Club





Business books: Top Picks

1
ITIL 4 Foundation PDF
ITIL v4 PDF Publisher: Axelos The ITIL v4 Foundation book by AXELOS

2
Business Model Generation book
Business Model Generation By Alexander Osterwalder, Yves Pigneur

3
The Intelligent Investor PDF
The Intelligent Investor Publisher: Collins Business Essentials

4
Investment Banking: Valuation, Leveraged Buyouts and Mergers and Acquisitions
Rosenbaum and Pearl PDF Publisher: Wiley

5
Fundamentals of Corporate Finance PDF
Fundamentals of Corporate Finance Publisher: Collins Business Essentials



Best Business Management books

#1ITIL Foundation: 4th edition

The fourth edition of ITIL (IT Infrastructure Library) was presented by Axelos in February 2019. The ITIL v4 (PDF and other versions available) focuses on practical aspects of IT management and provides a holistic approach with emphasize on Agile, DevOps and digital transformation topics.

#2Money master the game

Like all great adventurers, we’ll start by getting oriented for the trip. In chapter 1.4, you’ll learn more about the psychology of wealth, what holds us back, and some simple cures. You’ll uncover what it is you’re really investing for, and unleash the power of the best financial breakthrough strategies. Then, in the […]

#3The Subtle Art of Not Giving a Fuck

The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life. In this generation-defining self-help guide, a superstar blogger cuts through the crap to show us how to stop trying to be “positive” all the time so that we can truly become better, happier people. For decades, we’ve […]

#4Read People Like a Book

Read People Like a Book: How to Analyze, Understand, and Predict People’s Emotions, Thoughts, Intentions, and Behaviors (How to be More Likable and Charismatic).

#5Fundamentals of Corporate Finance

Fundamentals of Corporate Finance 13th Edition (International Edition). This book was designed and developed explicitly for a first course in business or corporate finance, for both finance majors and non-majors alike. In terms of background or prerequisites, the book is nearly self- contained, assuming some familiarity with basic algebra and accounting concepts, while […]

#6The Intelligent Investor

One of the greatest investors of the twentieth century, Benjamin Graham, proposed his philosophy of “value investing” that could protect investors from dramatic errors and teaches them to develop long-term strategies. This approach is exhaustively explained in The Intelligent Investor (PDF download available) book, which remains the stock market bible since its first […]

#7How Money Works

Money is the oil that keeps the machinery of our world turning. By giving goods and services an easily measured value, money facilitates the billions of transactions that take place every day. Without it, the industry and trade that form the basis of modern economies would grind to a halt and the flow […]

#8Business Communication

Everyday Business Storytelling: Create, Simplify, and Adapt A Visual Narrative for Any Audience. Communication is one of the basic functions of management in any organization and its importance can hardly be overemphasized. It is a process of transmitting information, ideas, thoughts, opinions and plans between various parts of an organization. Good and effective […]

#9How Business Works

Every type of business has to choose an ownership structure. Although there are variations globally, most countries offer similar types of legal entities, from a single- person private enterprise to a massive organization trading on a stock exchange. There are three key considerations: how big the venture is expected to grow; the complexity […]

#10Business Model Generation

It’s a book for the Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers (The Strategyzer series). Business Model Generation book provides practical tools for understanding, designing, and implementing a new business model or revamping an old one, co-created by 470 professionals from 45 countries and now practiced by millions around […]


Best books for entrepreneurs


#11The Essential Manager’s Handbook

The step up to a managerial role can be an exciting, but daunting, new challenge. Suddenly, you are responsible for making sure your team is working together, achieving results, and that overall your department is running smoothly. There is no single technique to becoming an excellent manager, but the Essential Manager’s Handbook provides […]

#12Operations Management

Operations Management is important, exciting, challenging, and everywhere your look! Important, because it’s concerned with creating all of the products and services upon which we depend. Exciting, because it’s at the centre of so many of the changes affecting the world of business. Challenging, because the solutions that we find need to work […]

#13Where Are the Customers Yachts

In 1940 Fred Schwed, a stockbroker whose father had lost everything as a short seller on Wall Street during the Roaring Twenties, published this timeless classic on how the stock market really works. Schwed, a pleasure-loving, cultured man who had been expelled from Princeton University in his final year for entertaining a lady […]

#14Corporate Finance 11th Edition

Corporate Finance, Eleventh Edition This book has been written for the introductory courses in corporate finance at the MBA level and for the intermediate courses in many undergraduate programs. Some instructors will find our text appropriate for the introductory course at the undergraduate level as well.

#15ISE International Business: Competing in the Global Marketplace

The 13th edition provides a complete solution that is relevant (timely, comprehensive), practical (focus on applications of concepts), integrated (integrated progression of topics) and the most up-to-date on the market. Available with Connect: Our highly reliable homework and learning management solution that embeds learning science and award-willing adaptive tools to improve student results.

#16Winning: The Unforgiving Race to Greatness

Winning: The Unforgiving Race to Greatness (Tim Grover Winning Series) From the elite performance coach who wrote the international bestseller Relentless and whose clients included Michael Jordan, Kobe Bryant, and Dwyane Wade, comes this brutally honest formula for winning in business, sports, or any arena where the battle is relentless.

#17Your Next Five Moves: Master the Art of Business Strategy

From the creator of Valuetainment, the number one YouTube channel for entrepreneurs, comes a practical and effective guide for thinking more clearly and achieving your most audacious business goals. Both successful entrepreneurs and chess grandmasters have the vision to look at the pieces in front of them and anticipate their next five moves. […]

#18Your Next Five Moves

Your Next Five Moves: Master the Art of Business Strategy (Hardcover / Audio / Kindle). Creator of Valuetainment, the # 1 YouTube channel for entrepreneurs and “one of the most exciting thinkers” (Ray Dalio, Principles author) in business today, provides a practical and effective guide to thinking more clearly and getting the most out […]

#19Finding the Winning Edge

When those who chronicle the history of the game list the individuals who had the greatest impact on the National Football League, Bill Walsh will clearly be among the names of Halas, Lombardi, Brown, Landry, Noll and Shula. But when you consider who has impacted the game most in terms of those who […]

#20International GAAP 2020 2021

Generally Accepted Accounting Practice under International Financial Reporting Standards. The content of this book takes into account all accounting standards and other relevant rules issued up to September 2020. Consequently, it covers the IASB’s Conceptual Framework for Financial Reporting and authoritative literature listed below. References in the main text of each chapter to […]