The Charger Blog
Associate accounting professor Alireza Daneshfar, an expert in business evaluation and new investment feasibility, was quoted in a WalletHub story that analyzed the filings of more than 400 top hedge funds.
August 31, 2018
The best recommendation Alireza Daneshfar, an expert on the stock market, financial reporting and corporate earnings, would give investors is to monitor the U.S. 10-year treasury interest rate.
"Stock market growth will sustain as long as U.S. corporations are posting sales and earnings growth and the 10-year treasury note interest rate is, as it is expected to continue to be, below 3.5 percent," he said in a WalletHub article analyzing the filings of more than 400 top hedge funds.
"If the treasury rate is being increased above this rate, stock price growth may slow down or even become negative for some stocks, especially those that have significant debts with variable interest rates," he continued.
Individuals investors, he said, should invest in companies that keep posting strong sales and earnings growth year-over-year and quarter-over-quarter and that have strong balance sheet and efficient cash flow management.
For investor who don’t have the time or resources to scrutinize and familiarize themselves with corporate earnings reports, he suggest a diversified approach. "Invest in S&P500 index funds, which include the 500 largest US firms," he said. "Those funds will be doing well as long as the US economy is doing well," he said.
"Stock market growth will sustain as long as U.S. corporations are posting sales and earnings growth." Alireza Daneshfar, Associate Professor of Accounting
He also predicted that the recent trade tariffs imposed on both China and the European Union wouldn’t have much of an impact short term or long term on the stock market, assuming trade negotiations are not prolonged.
"I don’t expect a significant trade war will take place, and I think they will agree to a negotiation eventually," he said. "Such a negotiation will be very good for the U.S. corporations as it may result in an easier access to the Chinese and European consumer markets. Thus, I believe the tariffs won’t have much effect on stock prices, and it could actually be good for stock prices, especially those that they are currently facing considerable restrictions to operate in those countries, such as U.S. Banks in China."
Daneshfar also believes that the stock market will not face a recession or a prolonged bear market for the foreseeable future. "One of the main reasons is that U.S. corporations are reporting strong sales and earnings growths for the second quarter of 2018, as they did for the first quarter, and they are expected to do so for the year," he said.
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