How to invest $100,000 when stocks are at all-time highs? Here’s what two wealth managers say
As stock markets press against all-time highs driven by the potential of artificial intelligence, the question of how to invest $100,000 has become more urgent than ever. To shed light on this, CNBC Pro asked two seasoned investment professionals — Richard Flax, chief investment officer at digital wealth manager Moneyfarm , and Robert Matthews, deputy chief investment officer at wealth manager WH Ireland — how they’ve managed client’s investments in the current environment. Though their perspectives differ in the finer details, both Flax and Matthews broadly agree that a diversified, long-term approach is crucial for investors looking to put their money to work effectively. Flax, whose firm targets retail investors, advocates for a relatively high-risk portfolio with a substantial 80% allocation to equities for those with some risk tolerance and no immediate need for liquidity. “We will continue to have a decent weight in U.S. equities,” Flax told CNBC Pro. “But perhaps relative to the global equity universe, we would probably have a bit more outside of the United States.” Echoing that view, Matthews says he sees opportunities in equity markets, particularly in small- and mid-cap stocks in the United Kingdom and Europe. “It is no surprise that we have seen a raft of takeovers across U.K. mid and small cap this year,” he said. “We have been adding to this area in the U.K. through Chelverton United Kingdom Equity Growth Fund .” The fund is up 7.28% so far this year. Matthews suggests that a suitable allocation for a typical client seeking growth and some income would be 62.5% in equities, 27.5% in fixed income, and 10% in alternates, property and cash. He also pointed to areas with good long-term growth drivers, such as health care, by adding exposure through the SPDR MSCI World Health Care ETF and drugmaker AstraZeneca for “bespoke portfolios.” “We see there being a golden age of innovation in healthcare supported by the adoption of AI across the industry,” he said. For the alternates portion of the portfolio, Matthews highlighted an existing holding, London-listed HICL Infrastructure PLC , which yields 6.6% and trades at a more than 25% discount to its net asset value. The fund is also available in the United States . The fund — which invests predominantly in U.K., European, and U.S. infrastructure — owns, for instance, a fifth of the railway link between the U.K. and Europe . It also has a 37.5% stake in the offshore transmission link that connects the U.K. to the world’s largest offshore wind farm. Looking ahead, Flax acknowledges the potential impact of political risks like upcoming elections in the United Kingdom and the United States. However, he emphasizes the difficulty of translating those risks into actionable investment decisions. Matthews also emphasized the importance of time in the market rather than trying to time the market. “It is for this reason that clients should have a minimum investment horizon of 3 years but the longer the better to help smooth out volatility,” he added.
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