Where to put new money to work outside of tech

Analysts recommend diversifying portfolios amid market highs, with DCLA's Sarat Sethi highlighting Thermo Fisher (TMO) for its recovering demand and unpriced trade deal tailwinds despite past underperformance. Blue Line Futures' Phil Streible is bullish on the U.S. dollar ahead of an expected Fed rate cut, citing its recent rebound and potential strengthening from trade deals. Meanwhile, Pivotal Advisors' Tiffany McGhee suggests reallocating new capital away from tech into real assets and higher-yield fixed income, including private equity and credit for accredited investors, to mitigate risk.

Analysis

Sarat Sethi of DCLA highlights Thermo Fisher (TMO) as a compelling investment opportunity within the healthcare sector, citing its past underperformance due to tariff impacts and economic uncertainty. The company is now experiencing recovering demand from biotech and healthcare clients, with anticipated future demand from government and education sectors. A potential U.S.-China trade deal is identified as an unpriced tailwind, suggesting further upside not yet reflected in the stock's valuation.

Concurrently, Phil Streible of Blue Line Futures expresses a bullish outlook on the U.S. dollar, anticipating strength ahead of the Federal Reserve's expected 25 basis point rate cut. Despite a nearly 9% year-to-date decline, the dollar index has rebounded almost 1% over the last month, reversing a previously crowded short position. Streible posits that new trade deals, exemplified by China's recent U.S. soybean purchases, could further bolster dollar demand by increasing foreign government needs for U.S. assets.

Amidst market highs, Tiffany McGhee of Pivotal Advisors advocates for portfolio diversification away from technology stocks. She recommends allocating new capital into real assets such as infrastructure, minerals, and real estate, alongside higher-yield fixed income instruments. For accredited investors, further diversification into private equity and private credit is suggested to mitigate risks associated with current market valuations.

Key Decisions for Investors

• Consider initiating or increasing exposure to Thermo Fisher (TMO) given its recovering demand, potential trade deal tailwinds, and current valuation not fully reflecting these catalysts.
• Monitor the U.S. dollar's trajectory, as a bullish outlook suggests potential for further appreciation driven by Fed policy and evolving trade agreements, impacting currency-hedged positions.
• Reallocate new capital towards real assets like infrastructure and higher-yield fixed income, and for accredited investors, explore private equity and credit, to diversify portfolios away from high-flying tech.