Investing in 2018 With Dr. Andrew Stotz
Looking to learn the keys to investing success? Get invaluable investing insights and advice from an experienced expert.
Published on 20 February 2018
Renowned investor Dr. Andrew Stotz sits down with us to discuss what his thoughts are on investing in 2018. He also shares with us some “must-do” advice for first-time investors and four fundamental factors every investor should adhere to.
Andrew Stotz, PhD, CFA is the CEO of A. Stotz Investment Research.
WEALTH (W): What differentiates your approach to wealth management from that of others in the industry?
Dr. Andrew Stotz (AS): My approach has been built over 25 years of being an analyst. Because I am looking at markets across the world, I am not driven by any one style. I’m not a value investor, I’m not a momentum investor, I’m an FVMR (Fundamentals, Valuations, Momentum, and Risk) investor. I use all four of these factors when I’m thinking of investing in a stock.
W: What can you teach individuals?
AS: How to look at a stock from every angle. Where can they get the data? How do they manage that data? How can they use that data to decide whether that stock is attractive or not? Also what type of studies I have done that will help them think about what is a dead end when it comes to investing and what is an area they should focus more of their time on. This includes value versus growth and by country to name a few.
How to look at a stock from every angle. Where can they get the data? How do they manage that data?
W: What rates of return can investors expect using your Quantimental value investing strategy?
AS: My objective is to match or beat the market return when looking at the overall market. It is not guaranteed though. The hard part you have is that sometimes in Asia it’s expensive to access markets so sometimes buying stocks or ETFs can be cheaper than buying funds. Thus, part of what I’m trying to do is help people develop their own method of selecting, but it really depends on what’s happening in the market. I also have different methodologies – from an aggressive one for when the market is performing well, to a defensive one for when it isn’t. Most importantly, you have to allocate correctly.
W: Which sectors of the global markets are you most excited about in 2018?
AS: Cyclical sectors. Materials and energy have a good chance of a very strong run in 2018 as the domestic economies are recovering and doing well. The biggest threat is the US market, which is really starting to get expensive. I would continue holding and run with it for the next six to twelve months if investing there.
W: What’s one piece of advice you would give to first-time investors in 2018
AS: Number one, always set a stop loss. You’re going to buy it at a certain price. Let’s say it is US$100. What price are you going to get out and say it was a bad idea? Number two, do not allocate all of your money into the market. We are at a time that the market is very expensive, putting all of your money into the market probably doesn’t make sense.