In This Article:
Horizon Investments' head of portfolio strategy, Zachary Hill, joins Market Domination with Julie Hyman and Josh Lipton to discuss balancing defensive and offensive strategies in the current market (^DJI, ^IXIC, ^GSPC).
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So when it comes to positioning, as we talked about, we're seeing a little bit of a defensive lead, at least in today's session. Is that how your positioning as well, or do you think are you sort of striking a different balance?
Yeah, I mean, today's a defensive day in the markets for sure, you know, utilities and staples are doing really, really well, but actually yesterday was the polar opposite of that. And so we think that, you know, the difficulty for market leadership is going to persist. I mean, at a high level though, um with the amount of uncertainty that we still have and the how quickly things can change from an outlook perspective. Um, you know, we think it makes sense to lower your overall, um, you know, size of the exposures in the portfolio and look for some places that are a little bit lower risk than the market to hang out. Um, and so for, you know, on the global equity side of things, we like international stocks more than we have, um, since the AI craze took off in early 2023. You got the dollar, um, you know, tailwinds there finally starting to weaken after being, you know, really persistently strong for the last few years. And just generally speaking, those stocks tend to trade with a little bit lower risk profile, so we do think that's an attractive place to be. But, you know, at the same time, like we we don't think we're going into a recession based on the policy mix we have at the moment on offer. We're just seeing a growth slowdown. So, you know, we're not fully embracing that defensive trade that you're seeing today in the market, but rather be kind of in the middle places like quality dividends and those types of exposures that can kind of weather through this noise and volatility that we expect.
Let's say, Zach, I do want to play offense though in the equity market. What would you suggest?
Yeah, I mean, our number one place to play offense, and we do think it has a lot of deregulatory tailwinds, is in banks in the US, so domestic banks, whether that's the large cap banks or a little further down the, you know, the cap spectrum can be a little riskier in the regional bank space. We think that's the number one place that has really nice tailwinds and they've traded really, really well. Actually kind of matched the, you know, the rebound that we saw in the mag 7 over this last, you know, from the market bottom to here. And so that's an area that we like to play offense in. You can also start to dip your toe a little bit into some of the into the tech names, maybe not to go overweight the top of the market because we think that's there's a lot of risk in that part of the market. But, you know, some of the software and cloud services providers, you know, that's that's an area that you can also take a little bit of risk if you want to be offensive at the moment.