Markets
are
red-hot,
and
investors
might
be
wondering
what
they
can
buy
right
now.
The
S
&
P
500
reached
a
record
high
in
March
despite
corners
of
it
already
getting
expensive,
some
pros
believe.
There
could
be
more
uncertainty,
with
some
still
expecting
the
U.S.
Federal
Reserve
not
to
cut
rates
despite
the
central
bank
indicating
it’s
staying
on
track
for
three
rate
cuts
this
year.
On
top
of
that,
some
are
calling
for
investors
to
move
out
of
cash
if
rates
do
fall.
If
you
had
a
spare
$1
million
to
invest
right
now,
what
should
you
buy?
CNBC
Pro
asked
fund
managers
and
wealth
advisors
how
they
would
allocate
their
portfolios
with
that
money.
The
60/40
portfolio
The
60/40
portfolio
is
a
good
starting
point
for
many
investors.
Indeed,
Aaron
Benson,
portfolio
manager
at
investment
bank
Baird,
says
he
uses
the
strategy
for
many
of
his
clients’
portfolios.
He
would
allocate
roughly
60%
into
stocks
this
way:
15%
each
to
U.S.
large-cap
growth
stocks
and
U.S.
large-cap
value
stocks;
4%
to
small-caps;
and
8%
to
mid-caps.
Another
15%
would
go
to
international
developed
as
well
as
emerging
markets
equities.
“We
really
believe
in
style
diversification
and
feel
that
remaining
diversified
with
value
and
growth
stocks
remains
prudent,”
Benson
said.
He
stressed
that
because
the
small-cap
market
is
“less
efficient,”
it’s
more
important
to
do
active
stock-picking
and
identify
the
best
opportunities.
“Small
cap
stocks
based
on
price-to-earnings
ratio
are
the
cheapest
they’ve
been
since
really
the
tech
bubble,
relative
to
large-caps,”
he
said.
“We
see
that
more
as
a
long-term
opportunity.”
With
a
million
dollars
to
invest,
it
would
be
“reasonable”
for
investors
to
put
their
money
in
both
small-
and
mid-cap
stocks
now,
he
said.
Benson
added
that
global
stocks
look
“very
cheap”
right
now,
relative
to
their
U.S.
peers.
“So
we
feel
very
comfortable
including
that
as
a
portion
of
one’s
allocation
with
with
new
capital
to
invest.”
As
for
fixed
income,
Benson
would
allocate
about
40%
this
way:
10%
to
short-term
taxable
fixed
income;
25%
to
intermediate-term
fixed
income;
and
3%
to
high-yield
bonds.
A
final
5%
would
go
toward
real
assets,
which
are
“good
diversifiers’
to
stocks
and
bonds,
he
said.
Examples
he
cited
are
real
estate,
infrastructure
and
commodities.
Baird’s
assets
under
management
stand
at
more
than
$405
billion,
while
its
private
wealth
management
assets
under
management
are
over
$275
billion.
The
size
of
the
average
client
account
is
about
$1.2
million.
Chris
Fasciano,
senior
portfolio
manager
at
Commonwealth
Financial
Network,
also
believes
that
the
60/40
portfolio
is
“again
a
worthwhile
asset
allocation.”
For
the
60%
allocated
to
stocks,
he
would
focus
on
U.S.
large-cap
growth,
value,
small-
and
mid-cap
stocks,
as
well
as
international
equities.
As
for
bonds,
he
likes
intermediate-term
fixed
income.
AI’s
power
needs,
tech
and
health
care
If
you’re
an
investor
interested
in
focusing
on
tech
and
artificial
intelligence,
take
a
look
at
the
allocation
of
Shams
Afzal,
managing
director
at
Carnegie
Investment
Counsel.
A
good
chunk
of
his
model
portfolio
comprises
allocations
to
tech
and
growth
stocks,
industrials
such
as
power
plays
on
AI,
and
semiconductors.
“As
AI
went
mainstream
in
2023,
it
sent
capital
spending
in
cloud
computing
capacity
and
data
center
storage
into
overdrive.
Valuations
in
the
sector
leave
little
room
for
error
and
multi-year
growth
is
almost
a
foregone
conclusion
in
semiconductors,
data
centers
and
other
verticals,”
Afzal
said.
“This
was
clear
in
Nvidia’s
recent
earnings
that
showed
400%
growth
year
over
year
in
their
data
center
business
alone,”
he
said.
As
a
result,
he
said,
there
is
“urgency
for
grid
modernization
and
future-proofing”
of
power
needs
driven
by
hyperscale
computing.
Afzal
named
one
stock
to
play
on
AI’s
power
needs:
Watsco
.
Overall,
these
are
his
allocations,
as
he
named
exchange-traded
funds
as
a
way
to
invest
in
such
trends
and
more.
This
portfolio
is
for
a
timeframe
of
one
year
or
so.
When
it
comes
to
international
stocks,
Afzal
likes
Mexico
as
it’s
a
direct
beneficiary
of
China’s
dwindling
foreign
direct
investments.
He
added
that
he’s
bullish
on
India
for
three
reasons:
It
“remains
the
go-to
destination”
for
sourcing
high-tech
labor;
is
undergoing
a
digital
transformation
across
industries;
and
is
seeing
“healthy”
demand
from
its
“sizeable”
middle
class.
100%
to
stocks
for
the
‘moderately
aggressive’
Louis
Navellier,
chairman
and
founder
of
Navellier
&
Associates,
would
be
100%
invested
in
stocks.
He
has
a
portfolio
for
the
“moderately
aggressive”
investor,
although
he
says
much
of
the
risk
comes
from
small-cap
stocks.
Overall,
he
said,
“The
U.S.
is
somewhat
of
an
oasis
now,
because
obviously
China
looks
like
they’ve
got
a
real
problem.”
While
buying
bonds
could
be
a
good
idea
now
as
yields
are
set
to
fall,
U.S.
investors
get
taxed
more
on
bonds
than
on
stocks,
Navellier
said.
“I
would
rather
have
long
term
capital
gains,
which
is
taxed
at
a
20%
rate,
then
bond
interest
tax
at
a
37%
rate,”
he
added.
This
is
a
breakdown
of
the
top
15
holdings
in
his
portfolio.
He’s
very
bullish
on
Nvidia
and
Super
Micro
Computer
right
now,
saying
their
earnings
are
“growing
fast”
and
Nvidia
is
still
dominating
the
chips
space.
Here’s
why
he’s
positive
on
Nvidia
and
Super
Micro
Computer.
Navellier
also
has
other
global
stocks
in
his
portfolio,
including
Chinese
electric
vehicle
maker
Li
Auto
,
Mexico’s
Vista
Energy
,
German
automaker
Volkswagen
and
Canadian
gold
producer
Alamos
Gold
.
The
average
amount
of
money
that
his
clients
invest
is
$1.3
million,
and
his
firm
manages
over
$1.2
billion.
