As the potential of artificial intelligence drives the stock market toward record highs, the question of how to invest $100,000 is more pressing than ever. To shed some light on this, CNBC Pro asked two seasoned investment professionals — Richard Flax, chief investment officer at digital wealth manager Moneyfarm, and Robert Matthews, deputy chief investment officer at wealth manager WH Ireland — how they are navigating the current climate. Manage client investments case-by-case. While their views differ on specifics, both Flakes and Matthews generally agree that a diversified, long-term approach is critical for investors looking to put their money to work effectively. Flax’s firm targets retail investors and advocates a relatively higher-risk portfolio, allocating 80% to stocks, for those with some risk tolerance and no immediate need for liquidity. “We’re going to continue to have a pretty large weighting in U.S. equities,” Flax told CNBC Pro. “But maybe we’ll be a little bit more outside the U.S. relative to global equities.” Matthews agreed, saying said he saw opportunities in the stock market, particularly in small and mid-cap stocks in the UK and Europe. “It’s no surprise that we’ve seen a lot of takeover in UK small and mid-cap stocks this year,” he said. “We’ve been adding capital to this sector in the UK through the Chelverton UK Equity Growth Fund.” The fund has risen so far this year 7.28%. Matthews suggests that for a typical client looking for growth and some income, a suitable allocation would be 62.5% to equities, 27.5% to fixed income and 10% to alternatives, property and cash. He also added investments through the SPDR MSCI World Healthcare ETF and a “customized portfolio” of drugmaker AstraZeneca, pointing to areas with good long-term growth drivers such as healthcare. “We are seeing a golden age of innovation in healthcare, supported by the adoption of artificial intelligence across the industry,” he said. For the alternatives portion of the portfolio, Matthews highlighted existing holding, London-listed HICL Infrastructure PLC, which yields 6.6%, trades at a discount of more than 25% to its net asset value. The fund is also available in the United States. For example, the fund invests primarily in infrastructure in the UK, Europe and the US and owns one-fifth of the rail lines between the UK and Europe. It also owns a 37.5% stake in the offshore transmission line linking the UK to the world’s largest offshore wind farms. Looking ahead, Flax acknowledged the potential impact of political risks such as the upcoming elections in the UK and US. However, he emphasized the difficulty of translating these risks into viable investment decisions. Matthews also emphasized the importance of timing the market rather than trying to time it. He added: “It is for this reason that clients should have a minimum investment horizon of three years, but longer is better to help smooth out volatility.”
