THURSDAY, March 28, 2024
nationthailand

Experts reveal how to manage risk as turmoil hits stock market

Experts reveal how to manage risk as turmoil hits stock market

Experts have advised local investors on how to manage their risk to deal with renewed volatility in global assets.

Signs of a second Covid-19 wave in Europe coupled with delayed rollout of US economic stimulus measures triggered selloffs of stocks, gold and oil on Tuesday, while the dollar suddenly strengthened.

However, experts reckon the low interest rate means volatile assets remain attractive to investors who are seeking good returns in the “new normal” long term, especially if prices fall.

Theeranat Rujimethapass, president of Tisco Asset Management, advised buying stocks during the market correction for long-term investment because the market is still being driven by hopes that a Covid-19 vaccine will be available next year.

He suggested risk-averse investors hold 20 per cent in stocks and gradually increase that investment, while those who could tolerate risk should invest 50 per cent in Thai and foreign stocks.

"Investors should pick not more than 15 Thai stocks in line with Tisco Strategic Fund [TSF]'s strategy, while selecting foreign stocks that benefit from the Covid-19 outbreak, such as biotech, healthcare tech and global tech shares, in line with Tisco Global Technology Equity Fund [TISTECH]'s strategy," he said.

“The rest of their portfolios should be made up of debt instruments to maintain investment stability and real estate investment trusts [REITs] to generate returns of 4 per cent per year."

He added that investing 20 per cent in stocks will generate higher returns than bank deposits and debt instruments at approximately 2-3 per cent per year, while investing 50 per cent in stocks will generate a return of about 5 per cent per year.

Navin Intharasombat, first senior vice president for foreign investment management at Kasikorn Asset Management, advised investors to allocate assets in line with K FIT Allocation M Fund (K-FITM) at low to moderate risk to generate returns of 5.5 per cent per year.

"This portfolio invests 29 per cent in short-term debt instruments, 25 per cent in Thai stocks, 25 per cent in foreign stocks (5 per cent in China, 4.5 per cent in Asia, 4.5 per cent in Japan, 4 per cent in the US, 4 per cent in Europe and 3 per cent in India) 10 per cent in other assets (5 per cent in gold, 3 per cent in infrastructure funds and 2 per cent in property funds) and 11 per cent in debt instruments (9 per cent in middle and long-term debt instruments and 2 per cent in foreign debt instruments)," he said.

Somchai Amornthum, CEO’s assistant at Krungthai Asset Management’s Strategic Asset Allocation & Fund Marketing Department, advised investing 54 per cent in stocks (30 per cent in foreign stocks especially China and 24 per cent in Thai stocks), 38 per cent in debt instruments, 3 per cent in gold, and 5 per cent in property funds and REITs.

"This investment portfolio will generate return at 5-7 per cent per year in line with Krung Thai Mee Sup Fund Class A (KTMEE-A), while investors could gain more returns if they take more risks," he said.

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