Where to invest $100,000
In the wake of a tumultuous U.S. presidential election, and with the Covid-19 pandemic upending almost every aspect of our lives, sitting in a cocoon of cash is tempting.
But interest rates around the world are at or near record lows, meaning your money is unlikely to grow if you simply hold on to it in your bank account. And while huge uncertainties remain about the course of the coronavirus and the outlook for global economies, some clear trends are emerging to present investment opportunities.
When Bloomberg asked five wealth managers where they’d invest $100,000 today, ideas ranged from real estate investment trusts that specialize in infrastructure for biotechnology and cloud-computing operations to providing financing for companies with $25 million or less in earnings. When asked what they’d do with that same chunk of cash if they could spend it on a personal passion, responses stretched from a foray into scripophily to buying contemporary art portraying strong African-American women.
Brian Katz investment ideas for these tumultuous times
The world is in desperate need of infrastructure investments. In addition to traditional maintenance on roads and bridges, our modern economy requires building and maintaining next-generation transportation and logistics, energy, and communications systems. One manager we like, Stonepeak Infrastructure Partners, puts money into a diverse subset of infrastructure sectors including power and utilities, transport and logistics, water, midstream energy, and communications.
We’re the most enthusiastic about their investments in communications and cold storage. The communications category includes wireless towers, data centers, and satellite networks to serve rural geographies.
Rural consumers rely on non-traditional internet providers, such as satellite networks, in the absence of robust cable and fiber infrastructure. The cost and economics to “wire” these individuals through traditional measures is prohibitive. The federal government, through the FCC’s Universal Service Fund (and other programs, such as the Connect America Fund) provide subsidies to satellite companies so these consumers have access to affordable internet, which helps to support demand.
Meanwhile, the cold storage industry, which maintains refrigerated warehouses and trucks, has showcased its resiliency during the recent economic downturn. We believe demand might accelerate as companies rethink their global supply chains and move more of the country’s mission-critical food and pharmaceutical supplies onshore.
Another way to play from Katz: I haven’t pulled the trigger on this yet, but I’d collect old stock certificates. A colleague has an old BMW stock certificate on his wall and there’s a really interesting industry around scripophily — collecting old bonds, stock certificates, old currencies. You can find stock certificates of Ringling Bros. Barnum & Bailey, of Apple, of Shearson Lehman. There’s a whole collecting area around the stock certificates of busted dotcoms.
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