Money manager John David is bracing for challenges related to President-elect Donald Trump’s tariff agenda.
David said he was concerned that the new government’s policies could “lead to serious inflation”, so he believed it was important to choose investments carefully.
“Small-cap industrials make more sense than large-cap industrials,” the CEO of Astoria Portfolio Advisors told CNBC’s “ETF Edge” this week.
David, who is also the company’s chief investment officer, expects the red sweep to help drive a pro-growth, pro-domestic policy agenda that will benefit small-cap stocks.
So far, Wall Street seems to agree. Since the presidential election, Russell 2000 As of Friday’s close, the index tracking small-cap stocks was up about 4%.
David, whose firm manages $1.9 billion in assets, prefers to stay at home despite the tariff risks.
“We are overweight the United States, and I think that’s the right strategy for the next few years until the midterm elections,” David added. “We have two years where he (Trump) can control a lot of the narrative.”
But David plans to move away from fixed income because of the challenges posed by growing budget deficits.
“If you do hold bonds, be careful,” David said.
Since the election, Benchmark 10-Year Treasury Bond Yield The stock was up 3% as of Friday’s close.
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