Paul Ma, vice president and lead portfolio strategist, and Vivian Hsu, Director, ETFs, discuss how to incorporate ETFs into your portfolio, as well as the pros and cons of different types of portfolios in today’s volatile environment. Paul believes a recession is the best time to buy stocks and “clean the house.” This helps clear the way for healthier companies to come through and show that they can survive. Large-growth companies were able to survive the cleaning and tend to do well early in the cycle, but it’s important to remember that the early stage we are experiencing now is very different from previous cycles and characterized by a lot of uncertainty. Vivian notes that many investors are allocating more than the benchmark to the information technology sector, which has had a tremendous run. She thinks it’s important for investors to consider hedging tech names and future uncertainties. Adding a value factor to a portfolio can help to balance it — a strategy that is often overlooked, because value hasn’t been outperforming the same way growth has.
Recorded on October 2, 2020.