Asset allocation tips to prepare for more volatility in 2020
Editor's Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It's a showdown of global proportions, so don't miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.
(Kitco News) - Being defensive is the way to go in 2020, according to Tracie McMillion, Head of Global Asset Allocation Strategy, Wells Fargo.
“Going into 2020, we do see the potential for more volatility and more market swings, so should an asset class go above our target, then we think that will be an opportunity to raise cash, should it go below the target, we would see an opportunity to invest some of that cash,” McMillion told Kitco News.
Her first tip is to hold cash as a tactical tool. Next, investors should move away from small cap stocks into larger, “higher quality” earnings stocks.
“For equities, we’re suggesting moving away from small caps, which tend to have lower quality earnings, and into high quality U.S. large caps,” McMillion said.
She added that sectors investors should focus on are tech, consumer discretionary, and financials.