Lessons SIPP Investors Can Learn from Recent Diversification of Major Global Brands
When it comes to switching over to Personal Pension schemes, the one thing that most investors look at is long-term growth potential. After all, it is their retirement they are planning for and if they can grow enough wealth, they are going to live in comfort throughout their senior years. This makes it all worth […]
When it comes to switching over to Personal Pension schemes, the one thing that most investors look at is long-term growth potential. After all, it is their retirement they are planning for and if they can grow enough wealth, they are going to live in comfort throughout their senior years. This makes it all worth it now; the struggle to put extra aside so that it can grow.
Recent news shows how major brands like Apple and Google are diversifying their product lines and services, which is sending stocks soaring. As ever, the two technology giants are vying for first place, so global investors are finding it a wise move to broaden their portfolio by adding both stocks to their long-term SIPP share dealing strategy.
What Makes SIPP Share Dealing Attractive
While it is possible to add a number of funds such as REITs, equity income funds and mutual funds to your SIPP portfolio, and actually a good idea, it is also advisable to look into adding shares (stocks) to your long-term investment as well. However, not just any stock will do as so many unexpected recent failures will indicate. Stock brokers and financial advisors suggest those looking to work share dealing into their SIPPs may want to:
- Enrol in courses to learn the fundamentals of investing.
- Hire a financial advisor who is duly licensed and registered with the FCA and/or the PRA.
- Begin learning online by following financial news and keeping ‘score’ of how shares are faring on the FTSE 100 Index in the UK as well as stock exchanges in global markets of interest.
At the moment, there is a bit of uncertainty in many global markets due to such concerns as Brexit and the somewhat unexpected election of Donald J. Trump to the presidency in the United States. As the world’s leading economy, what happens in the US will affect the rest of the developed world (and beyond).
How Product Diversification Can Influence Share Dealing
Both Apple and Google have been going back and forth as the favoured global brand and so the world is following what each company is doing in terms of diversification. This year, Google finally took the lead which was not totally unforeseen. Whilst neither is making the news due to diversification of holdings, they are both diversifying product lines and services which, in turn, impacts how investors rank each brand. Then there is Amazon that is holding on to its 3rd place ranking, and because they have built a strong consumer base on their ‘free shipping policy’ for Prime members, Walmart is now getting into the act and is going to be offering free shipping on all orders over $35 USD.
But the ‘diversification of services war’ doesn’t end there! Amazon is now in the process of opening a $1.5 billion (USD) facility in Kentucky that will employ approximately 2,000 workers. This new air cargo hub may be the impetus that inches Amazon closer, if not surpassing, Apple in the coveted number 2 spot for favoured global brands. Investors are watching these brands closely to predict future growth based on current diversifications in services and/or products. This is what a smart investor should do – watch and learn from the corporate giants. Stagnation is not in their vocabulary and it should not settle into a PPP or an SIPP. It is true that a Personal Pension Plan is a long-term investment for future wealth, but share dealing is only going to be as successful as the stocks in which you invest.
Projected Market Movement over Loyalty to Brand
Research long-term goals for companies you are considering buying shares in, and you will make an educated choice based on projected market movement as opposed to mere loyalty to brand. Where so many shareholders have gone wrong in the past is to buy based on emotion rather than analysis of data and movement within a company. Share dealing is a great way to add long-term growth to your SIPP but only if you learn from the diversification strategies of major brands that have done their homework well. Now it’s time to do yours. The question is, are you ready?