Astoria Portfolio Advisors’ CEO and Chief Investment Officer, John Davi, is strategically preparing for potential economic challenges stemming from President-elect Donald Trump’s proposed tariff policies. According to Davi, these policies could potentially lead to significant inflationary pressures, thereby necessitating careful investment selections.
He argues that small-cap industrial stocks present a more promising opportunity than their large-cap counterparts. This perspective aligns with his belief that Trump’s administration will likely advance a pro-growth, pro-domestic policy agenda, particularly benefiting smaller companies. Wall Street seems to echo this sentiment, as evidenced by the Russell 2000 index, which monitors small-cap stocks and has seen a roughly 4% increase since the election.
Davi, overseeing $1.9 billion in assets, also favors a domestic investment focus despite potential tariff risks. Highlighting the political landscape, he suggests that maintaining an “overweight” position in U.S. assets is prudent, particularly during the initial two years of Trump’s presidency when his policies could significantly influence economic narratives.
However, Davi exercises caution regarding fixed-income investments, citing concerns over the expanding budget deficit. This caution aligns with trends in the bond market, where the benchmark 10-year Treasury yield has risen by 3% since the election. He advises investors to approach bond investments with vigilance.
Overall, Davi’s strategy reflects an approach that leverages domestic small-cap opportunities while cautiously navigating potential risks associated with fixed-income securities and broader inflationary trends. His insights offer guidance for investors navigating the evolving economic landscape under the new administration.
Original Story https://www.cnbc.com/2024/11/16/protecting-your-portfolio-against-risks-tied-to-trumps-tariff-plan.html
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