Market comment 2022

[admin]

Of 195 nations on earth, just 34 are liberal democracies — where citizens have rights to free speech, free press, free and fair elections, and other liberties — according to a study by Varieties of Democracy. Living in a stable democracy leads to a longer and more fulfilling life, the data shows:

1. Health: If you live in a democracy that’s at least 25 years old, you're likely to live 14 years longer than people in autocracies, a University of British Columbia study found. Babies in mature democracies are 78% less likely to die in childbirth.
   
2. Wealth: Democratization boosts a nation's wealth 20% over 25 years.
   
3. Education: Democratization bumps citizens' enrollment in secondary education by 70%.
   

 Democracy is good for your health

As for where to invest now, Goldman brushes aside the growth versus value obsession and says focus on alpha — companies that can innovate, disrupt, enable and adapt. As well, look for companies that can deliver high and stable margins, instead of those with higher-revenue and record-high valuations that were chased in the last cycle. Also important — building a wall around portfolios using broad diversification across assets, geographies and sectors, i.e. real estate and commodities. Hedging is also important, and with the VIX volatility index VIX, 2.95% below 20, S&P 500 puts — an option that offers the right to sell at a specific price by a specific date — are an attractive hedge. Defensive value and high-dividend yield stocks are another area they like.

There may be little upside left in this stock rally, says Goldman Sachs. Here's where it advises investors to put their money now. - MarketWatch