Today’s market is witnessing a stock market that is climbing and bond yields depressed. In this environment, investors that have wide leeway to invest, or can afford to wait for better opportunities; may have a particular advantage. As a result of this, certain “go-anywhere” investments have attracted billions of dollars from investors over the years, by offering clear visions of how they can add value or how they can minimize losses; if traditional markets happen to take a loss. Because an increasing number of investors believe they should have the option to invest almost anywhere to protect their wealth, many appealing investment opportunities are rising in popularity.
To begin with, U.S. stock prices are closing in on record highs after the steady gains of the last five years. By classic yardsticks, such as price-to-earnings ratios, stocks are at least fairly valued if not overvalued, and pose a risk to investors. Realizing that they are unlikely to find any security in stock funds, much of the investment community is looking for some measure of protection against a steep market pullback. Additionally, while share prices in the developed world have surged in the last few years, emerging markets overall have been slowing down because of weaker-than-expected economic growth, a constant battle with rising inflation and the increasing threat of political upheaval. For value-hunting investors, this can mean the introduction of profitable investment opportunities.
A popular go-anywhere fund, $49 billion First Eagle Global Fund, have witnessed their cash holdings grow from 14 percent of total assets two years ago, to somewhere around 22 percent at the start of 2014, nearing the highest level in the portfolio’s 35 year history. Interestingly enough, the fund is currently allocating more time in researching opportunities in depressed emerging markets, clearly trying to uncover and seize the opportunities that are being presented; in those very lucrative sectors.