6 Investment Ideas for Your Christmas Stocking

Investing in shares is for life, not just for Christmas--here are six investment ideas for your stocking this year

Holly Cook 22 December, 2011 | 1:52PM

If you're thinking that a near-20% drop in the EURO STOXX 50 index over the past six months signals a buying opportunity then you might want to consider giving a loved one a shares-focused investment this Christmas. But remember, investing in shares is for life, not just for Christmas. Over long time periods, shares tend to outperform other assets, which is why traditional portfolio management wisdom dictates that investors with long time horizons should have the majority of their portfolio in shares and only scale back their allocation to these assets as their horizon nears. Below are some investment ideas for those who want to be positioned for a long-term rebound in European shares. This is by no means an exhaustive list--use Morningstar's tools to find investments that suit your (or your loved one's) portfolio needs. Be sure to make the most of our asset allocation tools to ensure you're adequately diversified and on track to meet your financial goals.

On the First Day of Christmas...One Individual Stock Option
BG Group (BG.) is currently rated 5-stars by Morningstar--one of just five LSE-listed stocks to hold that rating at present, meaning our research suggests the stock is currently undervalued by the market. Morningstar equity analyst Allan Good has a 1,900p fair value versus BG's closing price on December 20 of 1,310p, signalling substantial upside potential for long-term investors. Good writes in his research report that BG's early entry into liquefied natural gas made the firm a leading global integrated natural gas player, positioning it to capitalise on growing global demand for natural gas. The next decade will see BG expand its LNG activities by developing its extensive gas resource in Australia, Good says, while a preeminent position in offshore Brazil should lead to high-quality oil production growth. Premium subscribers can read more here.

On the Second Day of Christmas...Two Passive Investing Options
For passive investors, the db x-trackers MSCI Europe ETF is suitable for use as either a core portfolio building block or a tactical tool. Morningstar ETF analyst Gordon Rose writes in his research report that it can be used as a core portfolio building block for investors seeking exposure to equity markets across developed Europe. As for its potential uses as a tactical tool, Rose says more aggressive investors could use this ETF to overweight European equities, or it can be shorted to bet against the performance of the underlying equities to hedge an existing position. Premium subscribers can read more here.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Holly Cook

Holly Cook  is Managing Editor of Morningstar.co.uk

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