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The stock market (^GSPC, ^IXIC, ^DJI) is expected to experience fluctuations throughout this year due to various economic factors. Dakota Wealth Management senior portfolio manager Robert Pavlik joins Wealth host Brad Smith to discuss how the market landscape may differ from last year.
"What worked all last year probably won't work all this year; you're not going to have all these big Mag Seven type of rallies that are going to carry the overall market," Pavlik says.
He emphasizes the importance of carefully selecting quality companies that align with one's personal risk tolerance.
"If you have a high degree of risk, then maybe an Applovin (APP), a Palantir (PLTR), [or] a Snowflake (SNOW) matches into your portfolio," Pavlik explains. "But if you're like the rest of us ... you're probably looking at names that I've suggested in the past, like Costco (COST) ... or Alphabet (GOOG, GOOGL)."
Pavlik also touches on the "barbell approach" in investing, suggesting that while tech stocks like Apple (AAPL) can be included, focusing on steady performers in sectors like healthcare (XLV) and consumer discretionary (XLP) is key.
What would you use to describe what type of fluctuations we're expecting to see over the course of this?
So, what worked all sort of last year, you know, is may probably won't work all this year. You're not gonna have all these big mag seven type of rallies that are gonna carry the overall market. It's already a long trade right now. You you have to actually do your work and find companies that are good quality names depending on your risk tolerance. If you have a high degree of risk, then maybe, you know, an App Lovin, a Palantir, a Snowflake matches into your portfolio. But if you're like the most the rest of us, I mean, who, you know, are somewhere between, you know, five and seven on a risk tolerance of 1 to 10, you're probably looking at, you know, names that I've suggested in the past, like Costco, like Google, or Alphabet, or um, like TJX, or uh, AJ Gallagher. Yeah. I mean, these are good solid names that are doing doing really well. And nobody talks about them in the market. Nobody ever talks about AJ Gallagher, except when they report. Nobody ever talks about TJ Maxx, except when they report. So, these are the types of names that I look to put into my portfolio right now.
It's already a long trade right now.
And so, how does that factor into the barbell approach that we're increasingly hearing strategists talk about right now?
So, I think you can have some exposure to technology. You don't have to have, you know, these crazy high beta names in your portfolio, but you could put Apple in there. I think Apple is a solid company. It's not growing tremendous amounts. It's not the cheapest stock in the overall universe, but, you know, it it it's a good quality name that I don't think have to really worry about losing sleep over. Um, you you can even sort of expand your horizon and maybe add a little bit of risk to it with like a an Anet, or even, um, uh, a Broadcom. Yeah. But just know what you own. Then, I think you have to look towards, you know, what else do I put into the portfolio? A lot of activity has flowed into the healthcare space. Now, look at things like Merk recently. Merk, you know, has been a terrible stock, terrible performer. All of a sudden over the last week or two, you know, the stock has spiked up. Everybody's got to own Merk. For what reason? You know, I I wonder. And I I shake my head at at some of those trades. But I think if you look towards, you know, some other names in the in the healthcare space, or even in the consumer discretionary space, you don't have to take on a whole bunch of risk.
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This post was written by Josh Lynch