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Hopkins Investment Management Says People Should Still be Investing

Post a Comment October 6, 2009 – 10:22 am | Post Link |  Print This Post |

It seems counter-intuitive. When most people are cutting their investments and hoarding their money, an Annapolis-based financial planning and personal asset wealth management firm is recommending to its clients and anyone who will listen that they should keep investing if they want to make money.

“Putting your money in checking accounts is the safe bet, but not the smart one,” says Martin Hopkins, president and co-founder of Hopkins Investment Management and a financial expert for more than 25 years. “It’s true that you will not lose your money that way, but you also won’t gain any, not with interest rates as low as they are.”

Instead, Hopkins and his team, which includes international award-winning investment manager Rob Spanjaard, who manages a mutual fund which has earned 17 percent more than the S&P 500 and who guided his clients away from much of the market falls, believes people should continue investing, albeit smartly, with an eye for when the economy will rebound.

“Those with portfolios should position them to take advantage of the volatile financial markets. This can be done by utilizing long and short stock positions, meaning the more traditional stocks that are bought at one price and sold later at a higher price, as well as stocks that are sold first, with the belief that they will go down in value, and then bought back at the lower price,” Hopkins recommends. “Similarly, investors should purchase high yield bonds, which are riskier than checking accounts but have a much better return potential than most stocks.”

Hopkins is not suggesting people give up on stocks however, just that they should consider stocks they may never have noticed or considered before. “Emerging market stocks currently have better return potential than stocks of developed markets. Decrease your typical allocation in domestic U.S. stocks and put it into emerging markets stocks.”

The best known emerging markets at present, Hopkins says, are Brazil, India and China. These countries are experiencing huge economic growth, which typically leads to an increase in growth in their corporations and corporate profits, resulting in increased stock prices. China’s GDP, for example, has been growing at approximately 8 percent in 2009, even while the developed world is in a recession.

Finally, Hopkins recommends that investors, “allocate about five percent of their portfolio to commodities. These tangible traded assets like gold, energy and oil, and the funds that invest in them, reduce the volatility or risk without necessarily reducing the potential returns.”

Hopkins says they are currently utilizing all of these strategies, both for themselves, and for their clients in the New Jersey, Virginia, Washington, D.C., and Maryland areas. “It’s obviously not a guaranteed solution,” he says. “But it allows for the opportunity of greater returns than keeping money in checking accounts or under the mattress.”

To learn more about Hopkins Investment Management or to find a Resource Center filled with articles offering advice on personal finance and how to find the right financial planner, visit http://www.hopkinsim.com.

Hopkins Investment Management is a fee-only financial planning and investment management firm serving the Mid-Atlantic area including Washington, D.C., New Jersey, Virginia, and Maryland. Their focus is on personal, personalized care and attention.