ACI CEO Todd R. Walsh was recently quoted in Barron’s and MSN.com to discuss how investors should navigate the recent volatility in the stock market.
Here is an excerpt below from Barron’s:
“Todd Walsh, CEO, Alpha Cubed Investments: Our thesis this year has basically been to hold our tech, hold our AI positions, don’t pay too much. Trees don’t grow to the sky. But there’s value in the value dividend trade [a strategy of buying value stocks that also pay dividends]. If you index the S&P Value [index] to Nov. 1, when the Fed paused, and chart it against the Nasdaq 100, the returns to date are identical.
We deal with retail and high-net-worth clients, and a lot of them are focused on what’s happening in that tech trade. That’s because the returns had been kind of astronomical until a couple of weeks ago. What we’ve been trying to get them to refocus on since the beginning of the year is that when the Fed shifts policy to a pause, or becomes more dovish, that is wind at the back of that value dividend trade. Literally, it’s an opportunity to have your cake and eat it too. A lower- risk investment alternative in the value dividend sector, with the wind at your back with rates—and we’re probably going to have the wind at our back for a while.
Major selloffs are like earthquakes; we should expect some aftershocks as the market tries to stabilize over the next few weeks. Maintaining exposure to the hyperscaling that we’re continuing to see in AI makes sense. But don’t forget about that value dividend trade, because it has been contributing massively to returns up to this point. We think that’s going to continue, and it’s a nice way to balance portfolios out.”
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