According to Dave Gresek, managing director of investment strategy and research at wealth management firm Aspirant, the state the economy is in will become clear over the next few weeks, as corporations prepare their next earnings reports.
The economy and markets are reeling from a series of headwinds and tailwinds during the first half of the year, all of which have put them in precarious territory to transition into the third quarter, he said. “Earnings season will begin this week (when corporations report their second quarter earnings), which will be important and clear things up,” Grexek said in an interview.
Greisek said there are a lot of events happening right now amid the economic impact of inflation and rate hikes by the Federal Reserve Board, and global events that have created challenges for the economy, but also created some opportunities for investors. .
“We are not changing our investment strategies too much” as these forces come into play, he said, “because we are already where we want to be. Any changes Aspirant will make will be more for both equities and fixed income.” There will be a move to higher quality firms.”
Los Angeles-based Aspirant is making some moves for large, multinational corporate investments.
“When the market revalues during the first half of this year, it provides an opportunity for investors to buy better companies at cheaper prices,” Grecsek said.
The strategist said that for the long term, over the next decade or more, global and domestic economies are in good shape, but from the next year and a half, the picture may not be as good. “Immediately, we are still seeing GDP positive, but the next 18 months could be more challenging” with the recession possibly bringing the markets down 10% to 15%.
To counter the challenges, Greisek said the strategic policy for the firm has not changed from broad diversification across all markets. “We are still optimistic for more than a decade of equities but the next year or two could be challenging,” he said.
He added that Aspirant is currently positioning the portfolio both aggressively and defensively to manage both headwinds and tailwinds within the market. Offensively, GrecSec said Aspirant is looking at value companies, and defensively it is looking at high quality multinationals to protect against volatility. He added that investors can still find opportunities in the market by focusing on long-term investments rather than panic selling.