Market Overview

Pro: Here's How To Protect Your Investments If The Market Pulls Back 5%

Share:
Pro: Here's How To Protect Your Investments If The Market Pulls Back 5%

Is the stock rally that has been going for years running out of momentum? This has been a topic of debate for just as long as the rally has been occurring, and there is no way to know for sure. But heading into the autumn months, the S&P 500 could experience a 5-percent pullback, David Bianco of Deutsche Asset Management explained during a recent CNBC "Trading Nation" segment.

If the S&P 500 index falls from its current level of 2,471.65 to around 2,300 there are ways for investors to protect their portfolio from the downside. The answer is actually quite simple: Stick with what has been working in your portfolio, such as technology and health care stocks, to weather out the storm. After all, a 5-percent dip wouldn't necessarily be severe enough for investors to change their investment strategies.

Once the stock market exits the historically "challenged" months of autumn the bull market can resume for "the next year or two — and quite possibl[y] three," he added.

Nevertheless, there are some sectors where investors should exercise a good amount of caution, Bianco continued. Investors should consider avoiding bank stocks if there are more doubts surrounding the Federal Reserve's interest rate hike decision in December.

Finally, exiting 2017, the S&P 500 index is expected to fully erase all of its losses it suffers in a potential 5 percent pullback and end the year at 2,450, which does represent a slight dip from current levels.

Related Links:

The 7 'Gremlins' That Could Haunt The Stock Market

A Look At The Legacy Of Fed's Janet Yellen During What May Be Her Final Jackson Hole Meeting

Posted-In: CNBC David Bianco interest rate hikeAnalyst Color Top Stories Analyst Ratings Media Trading Ideas Best of Benzinga

 

Related Articles (SPY)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
TSCOPiper SandlerMaintains119.0
UNPBMO CapitalMaintains200.0
UNPArgus ResearchMaintains205.0
ISRGJP MorganMaintains665.0
EHTHRBC CapitalMaintains132.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com