Heading into 2025, when the incoming Trump administration is expected to make a plethora of policy changes, investors may be rethinking their portfolio strategy. GLOBALT Investments senior portfolio manager Keith Buchanan joins Wealth! Host Brad Smith to outline why he is shifting away from tech and leaning into financials.
"We've been looking at growth as a source of funds for some months now. As it grew as a much larger component of major indices, we saw sentiment reached to extremes in a way that we just haven't seen in the past," Buchanan says, noting that "A lot of that [growth] was largely the AI trade [and] kind of tech-oriented."
The portfolio manager says, "We've been moving to a more balanced approach here over the last couple of months. Not necessarily selling or going short [on] tech in any possible way, [but rebalancing]."
Within the financials sector, he says, "We absolutely have a preference towards some of the larger money center banks. We have positions in Bank of America (BAC), JPMorgan (JPM), Citigroup (C), just to name a few," Buchanan says, explaining that the large financial institutions stand to benefit from macroeconomic conditions with loan growth and profitability expected to improve as "economic activity and transactions continue to accelerate."
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