Investors are being advised to shift their focus to defensive strategies in the current uncertain market environment. Howard Marks, co-chairman of Oaktree Capital, emphasized the importance of prioritizing defense over offense during an interview on CNNMoney’s “Markets Now.” Marks, who authored “Mastering the Market Cycle: Getting the Odds on Your Side,” suggested that investors consider investing in utilities while reducing their exposure to more volatile tech stocks.
The rationale behind this defensive approach is grounded in the belief that the bull cycle in the stock market may be approaching its end. While Marks stopped short of advocating for a complete exit from the market, he cautioned against holding excessive cash positions. Instead, he recommended opting for stable stocks that can offer protection against significant losses in case market conditions deteriorate.
Another factor contributing to the need for caution is the ongoing trade war with China. Marks highlighted the potential risks associated with this geopolitical tension, emphasizing the far-reaching consequences it could have on the global economy if not resolved amicably. Despite expressing optimism that a resolution will be reached, he underscored the need for investors to be prepared for all possible outcomes.
The “Markets Now” program, which airs live from the New York Stock Exchange every Wednesday, provides valuable insights from industry experts to help viewers navigate the dynamic financial landscape. Hosted by CNNMoney’s business correspondents, the show offers a concise analysis of market trends and developments in a 15-minute format. Viewers can tune in to the live stream on CNNMoney.com/MarketsNow or access highlights and updates through the Markets Now newsletter.
In light of the current market conditions and geopolitical uncertainties, investors would be wise to heed Marks’ advice and adopt a defensive investment strategy. By prioritizing stability and risk management, they can better position themselves to weather potential market volatility and safeguard their portfolios against unforeseen challenges. As the adage goes, “defense is more important than offense” in times of uncertainty, and investors would do well to take heed of this prudent counsel.