Navigating the Shifting Investment Landscape
As the new administration takes shape, investors are bracing for potential challenges tied to President-elect Donald Trump’s tariff agenda. One money manager, John Davi, is taking a proactive approach to navigate these uncertain times.
A Shift towards Small-Cap Industrials
Davi, CEO of Astoria Portfolio Advisors, believes that the new administration’s policies could lead to inflation, making it crucial to choose investments wisely. He advocates for small-cap industrials over large-cap industrials, citing their potential to benefit from the pro-growth, pro-domestic policy agenda. This strategy seems to be paying off, with the Russell 2000 index, which tracks small-cap stocks, rising around 4% since the presidential election.
Staying Domestic Despite Tariff Risks
Davi’s firm, which manages $1.9 billion in assets, is overweight on the U.S. market, believing it to be the right playbook for the next few years until the midterms. With the new administration having control over the narrative, Davi sees opportunities for domestic growth.
Caution on Fixed Income
However, Davi is wary of fixed income investments due to the growing budget deficit. He advises caution for bondholders, citing the rising 10-year Treasury yield, which has increased 3% since the election.
Investment Strategies for Uncertain Times
In this environment, it’s essential to be selective with investments. Davi’s approach highlights the importance of adapting to changing market conditions and being mindful of potential risks. As investors navigate these uncertain times, a thoughtful and proactive strategy can help mitigate challenges and uncover opportunities.
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