In today’s market conditions, investors are advised to adjust their portfolios to account for potential inflation and volatility, as suggested by a top executive at J.P. Morgan Private Bank.
Grace Peters, the bank’s co-head of global investment strategy, highlighted in a recent interview with Bloomberg Television that the recent record highs in equities are justified by the overall increase in capital expenditure (capex).
“This surge in capex is not limited to AI development. Governments are allocating capital, and companies are following suit. The latest earnings reports showed a 12% rise in capital expenditure, not including AI capex, and we believe that this economic value will benefit risk-takers.”
Peters emphasized that J.P. Morgan Private Bank remains optimistic about equities but recommends that portfolios be diversified to handle various scenarios.
“We seek income with inflation protection. Infrastructure investments, which are still underrepresented in the market, are one option. We anticipate volatility, so hedge funds are a valuable asset to consider. Gold is also a viable option.”
“Interestingly, around 20% of our client portfolios are still in cash or short-term securities maturing in less than a year. Despite this, we are confident in the ongoing equity bull market. However, we believe that portfolio resilience is crucial to capitalize on emerging trends.”
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