Investors should take something away from the tough times we’ve experienced over the past year and one of the things that they need to remember is that investment, like golf, is a game of mistakes, said Tom McManus, CIO of Wells Fargo Advisors. He told investors where they should look to maximize profits.
“Becoming a better investor is about making fewer mistakes and making mistakes that are less severe,” McManus told CNBC. “So those mistakes over the last 10 years have been the tech boom-bust and the housing boom-bust as well.”
McManus recommended looking into companies that provide dividend to investors, but not necessarily ones with high dividend-yields.
“A company that has a dividend yield of 2.5 or 2.7 or 3 percent is actually yielding a little bit more [than the average of 2.2 percent], but if you look at the record of growth for that company and if you see it’s a very sustainable dividend based on the company’s cash flow, you can be much more confident that the growth will generate total growth over time,” he said.
Meanwhile, McManus discouraged investors from investing in treasurys because they don’t offer good value.
“The risk is that one might achieve a very low return after inflation if you own 5- or 10-year treasurys and plan on holding them to maturity," he said.
No immediate information was available for McManus or his firm.