A senior UBS portfolio manager says investors should focus on the months ahead rather than short-term volatility tied to geopolitical tensions.
In a recent Fox Business interview, UBS managing director and senior portfolio manager Jason Katz says markets are reacting to uncertainty surrounding the Middle East, particularly concerns about oil flows through the Strait of Hormuz.
He says focusing on near-term market swings may be the wrong approach for investors trying to navigate the current environment.
“I know it’s cliché. We hate uncertainty. We want to know clarity on when this war will end, when the Strait of Hormuz will open, when oil will retreat back into the $60s. And so investors need not look, say, the next 10 days, they need to look at the next nine months.
Because when we get there, then the world’s a meaningfully safer place. We take a destabilizing force in Iran, and we stabilize it. That will bode very well for the economic environment. We just have to have a little patience.”
Katz adds that even if tensions ease, investors will still face several structural issues that existed before the recent turmoil.
“We’re going to still face the same issues that we faced prior to all this in terms of sticky inflation. Will the Fed cut? Will AI eat the world?”
Katz believes that the market will continue to climb the wall of worry, noting that much of the recent decline could be temporary.
“This discount that we’ve just endured in terms of the pullback, a lot of that will be erased in the next, I believe, month.”
As of Monday’s close, the S&P 500 is trading at 6,795.98, down less than 3% from its all-time high.
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