Hawaii investment experts aren’t expecting too much from the U.S. stock market in 2010.
Then again, they didn’t anticipate too much last year either, and the three major indexes posted total returns ranging from about 23 to 45 percent.
So with that as a backdrop, four local stock experts are back at it again for the ninth annual Star-Bulletin survey of best investment ideas.
Barry Hyman, vice president-managing team for the Maui branch of FIM Group Ltd., will seek to defend his title after an impressive 125 percent gain in his hypothetical $20,000 portfolio. That’s heady stuff for a self-proclaimed value investor, who calls the overall market fully valued and expects a lot of churning this year but little, if any, forward progress.
He said if there’s anything that was proven in the last two years it’s that passive investing in diversified index funds is "a loser’s game during volatile periods."
"While 2010 will likely have little upside for the major U.S. market indexes, there will be lots of money to be made both in the U.S. and, especially, overseas by astute investors through selective investing," he said.
Hyman is joined once again in the contest by Kauai’s Norm Caris (up 97.9 percent in 2009), managing director-institutional sales for Caris and Co.; Richard Dole (up 37.8 percent), chief investment officer of Honolulu investment adviser Dole Capital LLC; and Dwight Melton (up 29.5 percent), co-founder of the Hawaii Stocks and Options group.
The participants may have long or short positions in the investments they recommend.
"Selection is key," Hyman said. "Just investing in entire markets or sectors ‘dumbs down’ portfolios. Each sector will likely have winners and mediocre performers. Investors need to own the well-managed undervalued winning companies in these sectors."
Hyman said the best sectors to invest in this year are health care, energy, food/agriculture and companies that benefit from the emerging economies of Asia, east Europe, Africa and South and Central America.