Markets have been hit by volatility over the past month leading some retail investors to question where to park their money. Regulators shut down Silicon Valley Bank on March 10 in what was the biggest U.S. bank collapse since the 2008 global financial crisis, while in Europe UBS rescued embattled lender Credit Suisse . But despite initially sliding on fears of a banking crisis, stocks have recouped most losses. The S & P 500 is on track to finish March flat and end the first quarter up more than 3%. So if you had $10,000 to invest, where should you put it and how much should you allocate to each asset class? CNBC Pro speaks to portfolio managers and investors to find out. Invest in volatility, bonds Brian Stutland, chief investment officer at Equity Armor Investments, said that if he was in “aggressive mode” he would maintain a long position in volatility futures contracts, such as SPIKES, via a small percentage of his portfolio. He also recommended getting exposure to some of the top holdings in the SPDR S & P 500 ETF , which tracks the S & P 500, as well as the VanEck Semiconductor ETF . The rest of his allocation would go to cash (10% to 20%), as well as short-term fixed income, he added. If in a more conservative mood, Stutland said he would put 50% in BulletShares fixed income ETFs. Unlike the traditional bond ETFs which take the average of bonds of various maturities, BulletShares has targeted exposure to bonds of only one maturity which is designed to help reduce interest rate risk. Another 25% would go to holding cash in certificates of deposit, he said, while the final 25% would go into a mix of the SPDR S & P 500 ETF and the Invesco QQQ Trust — a large-cap growth fund. Go global, buy gold Investors should consider global stocks which could offer them more safety, according to Victor Kuoch, director at Natixis Investment Managers Solutions. “Asia seems to be a safer place these days in terms of economic environment, less impacted by inflation, and could also benefit from both China’s reopening and a potential USD weakening when the [European Central Bank] catches up on monetary policy,” he told CNBC Pro. He said he’d invest 40% into stocks: 15% in Asia, 15% in the U.S., and 10% in Europe. “It is true that stock markets present a risk these days, but I believe there are some opportunities now that some correction happened on the valuation front,” Kuoch said. With yields trending higher currently, he would put another 40% into short-term bonds with durations of between one and three years. A further 10% would go into gold to benefit from its safe-haven appeal, Kuoch said, with the final 10% allocated to alternatives such as absolute-return or curve-steepening strategies. “Overall, my portfolio would be rather conservative and not too risk-on as the market sentiment should continue to be choppy until Q3 this year,” he said. Buy the dip in energy If the majority of your portfolio is in stocks, then having some exposure to gold and short-duration, high quality bonds would make sense, said John Petrides, portfolio manager at Tocqueville Asset Management. On the equities front, he told CNBC Pro that he would buy large-cap energy stocks. Those which are “more geared to the price and discovery of oil rather than natural gas look attractive following the sell off since the start of the year,” he added. Energy was the second-best-performing sector of the S & P 500 last week, as investors flocked back into the stocks amid a recent dip in oil prices, and Wall Street analysts recommended buying energy stocks. — CNBC’s Zavier Ong contributed to this report.
Source link: https://www.cnbc.com/2023/03/29/heres-where-to-invest-10000-right-now-according-to-the-pros.html