The election, the economy, just how big this week's U.S. interest rate cut will be — it has all left the market on edge. Savita Subramanian, an equity and quant strategist at Bank of America Corp., wants investors to avoid risks.
"You want to be in safe dividends — and I know this is the most boring call of all time, but sometimes boring is good," Subramanian said in an interview with Bloomberg Television on Monday.
With the Federal Reserve likely to kick off its rate cuts on Wednesday but inflation staying high, sectors like financials, utilities and real estate will likely see inflows as retirees pull out of money-market funds, the strategist said. Large-cap value stocks "look incredibly attractive," she added.
Investors have been torn between staying the course and chasing the big technology stocks responsible for much of the market's gains this year or starting to prepare their portfolios for a slowdown as they weigh whether the US central bank can navigate the economy to a soft landing.
Tech has slumped while real estate and utilities were the best-performing sectors within the S&P 500 so far in the second half, both rising more than 14% since the end of June. Financials ranked fourth among all sectors, while energy ranked last with around a 6% decline.
