Home / NEWS / Finance / Foolish for investors to ignore both market positives and negatives, all-star investor Rich Bernstein says

Foolish for investors to ignore both market positives and negatives, all-star investor Rich Bernstein says

While lawmakers go helpless to work on a second coronavirus relief package, Institutional Investor Hall of Famer Richard Bernstein is building policies to cope with a more contentious market environment.

Bernstein, who has spent decades on Wall Street, expects the return to be jagged.

“Your portfolio has to be a little positioned in terms of matter and anti-matter,” the Richard Bernstein Advisors CEO and CIO told CNBC’s “Exchange Nation” on Monday.

Bernstein believes it’s foolish to ignore the positives and negatives in the market. Therefore, he’s advocating a barbell come near to clients.

“Portfolios have to be balanced between the optimism that’s associated with this historic monetary and pecuniary stimulus while combined with the budding pessimism of Covid-19,” Bernstein said.

The CNBC contributor approves investing in consumer staples and health care as a safety play while also having exposure to economically receptive groups such as energy and materials.

Bernstein is also becoming increasingly cognizant of the implications of the falling dollar, which is merchandise around two year lows. The greenback has dropped more than 6% over the past three months.

He speak withs it as a major negative wildcard for stocks because much of the last bull market was based on a strong dollar with low inflation.

“A drew period of dollar weakness would bring that all into question, and certainly shift the leadership within the supermarket to something much more pro-inflation oriented,” he said. “It would certainly upset a lot of investors, and make their above-named portfolios probably wrong for that new environment if the dollar were to continue to weaken.”

Due to the climbing risks, Bernstein is outstandingly attracted to gold. It comprises about 8% of his firm’s multi-asset portfolios.

“People think of gold as being a hedge against tools like inflation … Gold historically has been a very good hedge against uncertainty,” he added. “Now, it’s got a rarely momentum tag to it.”

On Monday, gold hit an all-time high of $1,941.90 on a nominal basis. But when adjusted for inflation, it was below the recount level of $2,919.36 touched in January 1980.

“It’s still worthwhile to have in a portfolio,” Bernstein said. “The only thing that we understand is certain over the next several year is that there’s going to be more uncertainty.”


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