These are the 6 best long-term investing opportunities right now, according to a global portfolio management head at Goldman Sachs
Ideally, Barrs said his investments aren't overly reliant on unreliable outside forces like government support but can simultaneously benefit from demand drivers, such as technological innovation or the shift to renewable energy. In terms of controllable factors, Barrs watches a firm's management and governance structure and then determines if future growth is priced in.
Companies become undervalued when there's a gap between the company's current value and its fair value, though the reason behind the disconnect can vary greatly by what market it's in. In the US, investors tend to be too short-term minded, which leads to what Barrs called a"time horizon inefficiency." But international markets, he said the greatest inefficiency is with information, meaning that domestic investors typically aren't familiar with foreign companies — especially smaller ones — or don't have the right data to evaluate them.
By following this strategy, Barrs said that his portfolios often skew toward high-quality stocks with a growth tilt, though value-oriented companies also make up a chunk of his investments.After breaking down his investing philosophy, Barrs shared six investments he likes right now., which have significantly lagged their larger peers this year since they're an economically sensitive group in a weaker-growth environment.
"There are a lot of parts of the small-cap space that are being penalized from some of those macro concerns that existed over the last couple of years," Barrs said."As we go into a slightly more muted inflation environment, [that] should crystallize into a very positive backdrop for growth for those assets.". Investing in chip production is a bipartisan priority, as shown by the $280 billion CHIPS Act passed last year.
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