If you can stand the wild swings in the market, Meghan Shue at Wilmington Trust believes this is an ideal time to start investing your money.
It may seem counter-intuitive, but she prefers to invest in stocks now than it did earlier this summer when Wall Street was quieter.
“It’s actually more worrying when it looks like everything is fine and the skies are clear,” the company’s head of investment strategy told CNBC’s “Trading Nation” on Friday. “There might well be some risks on the horizon.”
While recognizing that there is no shortage of problems from the rise of the Covid-19 Delta variant to Federal Reserve policies and inflation, Shue is confident they won’t wipe out the economic recovery or negatively impact the economy in the long term Market will have.
“The volatility we’ve seen in the market is actually a bit refreshing because we had an environment with very, very little volatility,” she said. “Usually you see a pullback of 5 to 10% [each year.] It’s been over ten months since we’ve seen more than a 5% pullback. “
Although the Dow, Nasdaq and S&P 500 had positive trading hours on Friday, the three indices ended the week lower. The Dow hit a three-day losing streak and tech-heavy Nasdaq had its best day in a month.
Shue, who oversees $ 141 billion in assets, notes that it is critical for investors to diversify and have a time horizon of at least 9 to 12 months due to the choppiness.
“We don’t think it’s really advisable to determine the ups and downs and back and forth of this particular trade,” said Shue, a CNBC official.
Their top positions are financials, energy, and commodities because they are positioned to benefit from economic growth and should benefit from rising interest rates.
“We have a bias towards cyclical values and values,” she noted. “We assume that the first rate hike will take place at the end of next year or at the beginning of 2023 at the earliest. And I think the economy and the markets will be able to handle it well.”
She also sees parts of cyclical consumption getting a boost from a strong big back to school and vacation season.
“The consumer is in a very strong position,” she said.
And, it might not be one of their top places to invest, Shue wouldn’t forget about growth either.
“Stay in some technology and growth areas of the market as well,” Shue said. “We like spots in healthcare and the pharmaceutical industry.”
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