Five stock picks for 2020 and post-election strategy

TL;DR

Freddy Lates, fund manager of the Latitude Horizon Fund, discusses the impact of the UK election on market direction and asset choices.

Transcript

hello with me today is Freddy late fund manager of the latitude horizon fund hi Freddy hello the elections done and dusted a significant conservative party majority exactly what we're told the markets wanted we had the initial sort of borås bounce classes a couple of days I mean what is your reaction to the actual result both in terms of what it me... Read More

Key Insights

• 🥳 The conservative party majority in the UK election is seen as positive for the market, reducing business investment concerns.
• 😘 UK domestic stocks should be of interest to investors due to lower uncertainty and improved investment outlook.
• ❤️‍🩹 The FTSE 100 is expected to reach 8,000 by the end of next year, benefiting mid-cap stocks.
• ❓ Freddy Lates suggests stocks like Unilever, Tesco, and Imperial Brands as potential investment options in the UK market.
• 👋 When compared to other asset classes, equities continue to be a more attractive option, especially for high-quality stocks with good dividend yields.
• 🥶 Lates predicts Tesco's stock to do well in 2020 due to its high free cash flow and growth options.

Questions & Answers

Q: How does the UK election result impact market direction and asset choices?

Freddy Lates believes the conservative party majority is positive for the market, reducing concerns and improving business investment. It provides a higher level of certainty for investors.

Q: What is the potential level for the FTSE 100 by the end of next year?

Lates believes 8,000 is a fair level for the FTSE 100, considering the potential bounce in the market, but it also depends on the performance of Sterling.

Q: Should investors focus on UK domestic stocks?

Lates suggests investors should focus on UK domestic stocks, particularly in the 2 to 10 billion market cap range, where earnings are earned in the UK. Stocks like Howdens and Tesco are examples of high-quality UK-focused businesses.

Q: How is the equity portion of the portfolio split geographically?

Lates mentions that around 15% of their equities are invested in the UK, primarily in large liquid stocks that have global exposure. They won't be trading more into the UK market due to ongoing uncertainty.

Summary & Key Takeaways

• Freddy Lates sees the conservative party majority in the UK election as good news for the market, reducing concerns of a Corbyn government and improving business investment outlook.

• He expects the FTSE 100 to reach 8,000 by the end of next year, with mid-cap stocks benefiting as well.

• Lates suggests focusing on UK domestic stocks for lower uncertainty and improved investment outlook.