5 Market Pros Speak on What to Do Now
Some of the smartest strategists on Wall Street have taken on a decidedly cautious tone.
Some of the smartest strategists on Wall Street have taken on a decidedly cautious tone. They’re not exactly battening down the hatches, but it’s clear that with continued volatility in both the stock and bond markets, and recession worries on the rise, aggressive bets are out, defensive strategies are in and an eye for bargains, especially overseas, is a must.
Read on to see their latest takes on the market’s direction and what it means for your portfolio.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
David Kelly, JPMorgan Chief Global Strategist
People should be less worried about owning stocks and more concerned about what part of the stock market they own. Focus on financials and energy, two sectors we view as defensive because they will be less sensitive to economic cycles. U.S. shale oil has transformed energy into a less volatile industry. And financial firms are much more stable today than people realize.
Liz Ann Sonders, Schwab Chief Investment Strategist
Take advantage of market swings to rebalance your portfolio. With recession risks rising, now is not the time to make aggressive bets in any major asset class. Focus on shares in large U.S. companies, not small ones. We favor health care stocks because they offer good growth at a reasonable price. When picking stocks, it’s important to focus on firms with stable earnings, steady dividend growth and low volatility.
Sarah Ketterer, Portfolio Manager, Causeway International Value Fund
International value stocks are so cheap, we think a recession is already priced in. We like banks, industrials and insurers. Many European banks are run by competent managers who have repaired their balance sheets. Volkswagen is better run than it has ever been. And many European value stocks, such as French oil giant Total and German shipper Deustche Post DHL, pay hefty dividends.
John Linehan, Portfolio Manager, T. Rowe Price Equity-Income
Now is the not the time to be aggressive with your investment strategy. Instead, do a portfolio health check and set aside some cash as dry powder, because if we do go into a downturn, there could be a lot of opportunities. When things are at their worst, it’s often the best time to buy companies that are sensitive to the economic cycle. We see opportunities in chemical companies, paper companies and financials—that’s where we’re concentrating our firepower now.
Mary Ellen Stanek, Chief Investment Officer, Baird Funds
Control what you can control. Lower the risk in your bond portfolio by trimming stakes in high-yield debt and bank loans. Invest in a high-quality short-term bond fund that you can sell quickly at a reasonable price. You’ll get a yield north of 2% in a diversified portfolio with low interest-rate volatility. High-income investors with taxable accounts should look at munis. They offer compelling tax-adjusted yields.
Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.
-
How to Help Your Kids Without Ruining Your Retirement
Here are some general considerations to ensure the gift of assets to your kids will not negatively affect your financial future.
By Mario Hernandez Published
-
AI to Power the Next Generation of Robots
The Kiplinger Letter There's increasing buzz that the tech behind ChatGPT will make future industrial and humanoid robots far more capable.
By John Miley Published
-
How Inflation, Deflation and Other 'Flations' Impact Your Stock Portfolio
There are five different types of "flations" that not only impact the economy, but also your investment returns. Here's how to adjust your portfolio for each one.
By Kim Clark Published
-
Kiplinger's Economic Calendar for This Week (April 29-May 3)
Check out our economic calendar for this week, as well as our previews and recaps of the more noteworthy reports.
By Karee Venema Last updated
-
Why I Still Won't Buy Gold: Glassman
One reason I won't buy gold is because while stocks rise briskly over time – not every month or year, but certainly every decade – gold does not.
By James K. Glassman Published
-
Should You Use a 25x4 Portfolio Allocation?
The 25x4 portfolio is supposed to be the new 60/40. Should you bite?
By Nellie S. Huang Published
-
Retirement Income Funds to Keep Cash Flowing In Your Golden Years
The stars are aligning for retirement income funds, which are aimed to engineer a steady payout of cash for retirees.
By Nellie S. Huang Published
-
10 2024 Stock Picks From An Investing Expert
These 2024 stock picks have the potential to beat the market over the next 12 months.
By James K. Glassman Published
-
6 Best Books on Investing
investing These six books will help you be a better investor.
By Coryanne Hicks Last updated
-
Special Dividends Are On The Rise — Here's What to Know About Them
More companies are paying out special dividends this year. Here's what that means.
By Kim Clark Published