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In today's volatile market (^GSPC, ^IXIC, ^DJI), investors are grappling with the challenge of determining which dips are worth buying. Northwestern Mutual Wealth Management chief portfolio manager of equities Matt Stucky joins Wealth to discuss navigating this uncertainty.
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You know, Matt, we often hear this this, you know, phrase buy the dip, but how can investors determine which dip is viable, what dip to buy and and how to go across kind of their own checklists as they are looking at a lot of dips right now?
Yeah, I I think that's a really tough question to answer. I I I think buying the dip, I think is is always easy to do if we're looking in the past. It's harder to do when we're in the present. And so looking at looking at today's environments, who knows whether or not the levels we are today are indeed the levels that when we look back a few years from now were the the bottom of the market. And so, you know, if if I were if I were in your shoes or, you know, one of the the shoes of your your your your viewers, I wouldn't necessarily hold myself to nailing the bottom. I would just look, you know, across the investment landscape and say, you know, these are good values today at these prices. I'm willing to step in and and have the appropriate time horizon to have a successful outcome three, four or five years down the road. And so, um, you know, I I would say, you know, continue to stay diversified in this environment, uh, and put capital to work in a diversified way. That's your best bet for navigating volatility in this environment.
What's your top equity or stock idea for us right now?
You know, in in terms of individual names, um, you know, you know, put aside the comments of the diversification, you know, companies that to me have uh higher quality characteristics make a lot of sense in this environment. You know, they tend to have pricing power to offset a lot of the the trade back and forth that we're seeing in the headlines today. They they tend to have kind of more stable end markets. Uh and you know, from a balance sheet perspective, they tend to be also better uh better equipped to handle uh abs and flows in the economy. And so a name like Intercontinental Exchange makes a lot of sense to me in this environment, you know, just looking over the last 12 months, volatility actually is a boost to their fundamentals in their exchange business. Uh we've seen volumes in the futures business up roughly 30% year-over-year. Uh and then if, let's say that, you know, policy uncertainty translates into macroeconomic downside, to me, that means interest rates are likely moving lower, uh with the Fed coming coming back into easy mode. That's a tailwind to IC's mortgage business, uh in terms of mortgage activity, uh coming off of, you know, roughly 20-year lows back to uh back to growth territory. And so that's a name that I think is uniquely positioned given its high quality characteristics and a little bit of defensiveness in the business model that can operate well in this environment.