4 days ago
Worried about market volatility? Be sure to stay diversified.
President Trump's tariff moves have some investors on edge. That's why Envestnet Solutions co-chief investment officer & group president Dana D'Auria advises her clients to stay diversified, calling it the "antidote to uncertainty." Hear more from D'Auria in the video above.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Now, tariffs are back in the news, which by the way, I don't think was a big surprise, right? It was a 90-day pause. It's not surprising at all that, you know, some of the rhetoric is coming back into this because they've really, they they've got less than a handful of, uh, actual agreements made during those 90 days. So none of this is is incredibly surprising, but it does inject a lot of uncertainty and diversification really is kind of the antidote to uncertainty in investment markets.
So where do you think, um, the best place to look for that diversification is right now?
Yeah, I mean, a lot of portfolios, I mean, we're, you know, we we oversee obviously, uh, big portfolios that, um, retail investors, right? So retirement type portfolios, uh, what people are living on and and expecting to live on in their old age. And um, you know, the the 6040 remains kind of a standard bearer, but in the last, you know, several years because of just the predominance of US markets, you've seen a lot of, you know, large cap push into large cap questioning around, do I need something other than the S&P 500? Do I need to be in small cap stocks? You know, is there a good argument for international diversification? And we do, we think there definitely is, right? I mean, at the end of the day, the market is pricing what the value of those future cash flows is from all of those different sectors. So having international positions including emerging markets positions, we think pays off in the long run. And as a starting point, even if you're just looking at, you know, what is the weight in the overall market? What does the MSCI ACWI have as a weight to these places? If nothing else, that's a that's a nice starting point. Small caps as well, I mentioned them before, uh, there is, you know, they've struggled for sure. Uh, there's a profitability issue in the US. However, if you look internationally, small caps have, you know, stood up a lot better. There's less of a profitability issue and there's also a lot more easing going on internationally. So those companies have done better this year. Again, a sign of why you want to be kind of diversified in these different parts of the market.
