The three reasons I won't buy any US shares for income right now, by top investor

Peter Elston, who jointly runs the Seneca Income and Growth investment trust, which has returned 36 per cent over the past three years, has revealed for What Investment the three reasons why he won’t buy US shares for income right now.

 The three reasons I won't buy any US shares for income right now, by top investor

Matthews selected the UK shares he sees as value right now


Peter Elston, who jointly runs the Seneca Income and Growth investment trust, which has returned 36 per cent over the past three years, has revealed for What Investment the three reasons why he won’t buy US shares for income right now.

Peter Elston, who jointly runs the Seneca Income and Growth investment trust, which has returned 36 per cent over the past three years, has revealed for What Investment the three reasons why he won’t buy US shares for income right now.

He commented, ‘Firstly and quite simply, US equities look quite expensive now when compared to alternatives. Secodnly, the US is never a particularly high yielding market, the payout ratios from US companies tend to be quite low, and they are now.’

Read more: What would Donald Trump being elected US president mean for investors?

Elston continued, ‘the third reason is that we think the US economy is in quite a late stage of the cycle now, that is not to say we think there will be a recession or a bear market tomorrow, but when compared to other markets, it is near to the end of the cycle, and so it is not a good time to invest in the US.’

He added that a victory in the US Election for Donald Trump may mean there is a ‘natural case’ for expecting the dollar to fall from its current level.

The Seneca Income and Growth Investment Trust trades at a premium to net assets of 0.8 per cent.

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