Money manager John Davi is bracing for potential challenges ahead as President-elect Donald Trump’s tariff agenda takes center stage. Davi expressed concerns that the new administration’s policies could lead to inflationary pressures, prompting him to emphasize the importance of making strategic investment choices.
In a recent interview on CNBC’s “ETF Edge,” Davi, who serves as the CEO and chief investment officer of Astoria Portfolio Advisors, highlighted the need for caution in navigating the current market landscape. He suggested that small-cap industrials may offer more favorable opportunities compared to their large-cap counterparts, citing potential benefits from a pro-growth, pro-domestic policy agenda under a Republican-controlled government.
The market seems to be responding positively to this outlook, with the Russell 2000 index, which tracks small-cap stocks, showing a 4% increase since the presidential election. With $1.9 billion in assets under management, Davi’s firm has opted to maintain an overweight position in U.S. equities, anticipating continued support for domestic-focused companies in the near term.
Despite the potential risks associated with tariffs and trade policies, Davi remains wary of fixed income investments due to challenges stemming from a growing budget deficit. He cautioned investors to exercise caution when holding bonds, pointing to a 3% increase in the benchmark 10-year Treasury yield since the election.
As investors navigate the uncertainties of a changing political and economic landscape, Davi’s insights shed light on the importance of strategic asset allocation and risk management. By staying attuned to market trends and policy developments, investors can position themselves to capitalize on emerging opportunities while safeguarding their portfolios against potential downside risks.
