The possibility of a trade war brewing between the United States and China — the world’s two biggest economies — threw 11 S&P 500 sectors into correction territory (decline of at least 10% from the latest peak) late last month. The trigger was the executive memorandum signed by President Trump to impose tariffs on up to $60 billion in Chinese imports targeting the technology, telecommunications and apparel sectors. In response, China proposed a list of 128 U.S. products worth $3 billion as potential retaliation targets.

Expert Advice – A Must in this Scenario

Given the widespread uncertainty, the task of building a portfolio of stocks for handsome returns is a herculean task. Furthermore, with a huge number of stocks available in the market at any point of time, spotting potential outperformers is very tough for individual investors. In the absence of proper guidance, identifying a winning stock is akin to searching for ‘a needle in a haystack’.

Additionally, with time at a premium these days, it is next to impossible for investors to go through the extensive process. Given this backdrop, it is in the best interest of investors to seek guidance from “experts in the field.” The concerned experts are brokers.

Broker Advice – The Saviour

The “experts” in the field of investing are brokers who are equipped with thorough knowledge about the space. Brokers, irrespective of their types (sell-side, buy-side or independent), have at their disposal a lot more information on a company and its prospects than individual investors. 

To attain their objective, they go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations. Broker opinion should thus act as a valuable guide for investors while deciding their course of action (buy, sell or hold) on a particular stock.

Direction of Earnings Estimates: A Winning Pointer