Five share tips for long-term growth

A professional investor tells MoneyWeek where he’d put his money now. This week: John Wood, senior fund manager, JOHCM UK Opportunities fund. As the market becomes more short-termist, investors should concentrate on secular growth areas.

A professional investor tells MoneyWeek where he'd put his money now. This week: John Wood, senior fund manager, JOHCM UK Opportunities fund

The big question investors should be asking right now is: where are we in the corporate profitability cycle? Although we can't be certain as yet, many analysts think that corporate profitability may have peaked. This means we are reaching a point where merger and acquisition activity whether by infrastructure funds, private equity or other quoted companies could be destroying value. Low interest rates have allowed the market to overlook this as deals raise earnings. The market has become very short-termist, focusing on where the next deal might come from, without thinking about expected returns on investment. Relative valuations have helped drive prices higher across sectors. This could last for some time if debt stays cheap and private equity firms remain under pressure to invest their funds.

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MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.