What Trump’s Win Means for the Markets: 3 VIP Views
For both equities and fixed income, “this is a backdrop where you do want to stay up in quality,” said Sonders. On the fixed income side, “you’re not getting enough of a yield pickup by going out the risk spectrum into high yield, given how tight spreads are. So stay in investment grade or in Treasurys,” she said. Sonders would advise investors to stay disciplined, “the boring stuff” like diversification across and within asset classes, making sure they’re aware of concentration problems in their portfolio and periodically rebalancing. These are the tried and true recommendations from Schwab, particularly in an environment like this,” she said. While some investors rebalance on a calendar schedule, Schwab suggests considering volatility- or portfolio-based rebalancing, “meaning let moves in your portfolio beyond some parameters dictate when it might make sense to do some trimming or some adding as opposed to just waiting for a moment in time on the calendar,” Sonders said. Advisors, besides conveying these themes to clients, may need to “help the half of the people that are not happy about what happened, not letting the emotion associated with a very emotional election get in the way of investment decision making.” Peter Mallouk...
